What is a private real estate investment trust (REIT)?
Private REITs are investments that provide exposure to real estate. The main difference between a private REIT and publicly traded REIT is that private REITs are not traded on a public exchange. Private REITs are typically valued monthly or quarterly and the value is based on their underlying property portfolios’ fair market value. This fair market value is determined by third-party appraisal firms. This type of valuation method reduces price volatility when compared to publicly traded REITs, which are traded daily.
What type of real estate does RISE invest in?
RISE Properties Trust’s investment strategy focuses on the acquisition of underperforming garden-style multifamily rental communities in primary US markets. RISE currently specializes in the U.S. Pacific Northwest, specifically the Seattle and Portland markets.
Seattle has an impressive employment base and strong employment outlook. Fortune 500 employers such as Amazon, Microsoft, Boeing, and Costco—along with a thriving technology sector—are powering employment growth. In management’s opinion, this elevated job growth leads to strong net in-migration, which, when coupled with Seattle’s geographic barriers to growth, contributes to strong real estate appreciation.
Does the fund have a regular distribution?
Yes, RISE currently pays a monthly distribution of $0.0733 per unit, which equals $0.88 per unit annually. This can be received as a cash distribution or reinvested automatically (DRIP).
How are RISE distributions classified for tax purposes?
Currently, 100 percent of RISE distributions are classified as Return of Capital (ROC). Whether the distribution is taken as cash or reinvested does not change the tax treatment.
As a Canadian investing in a Canadian REIT with U.S. assets, am I considered to own foreign real estate?
No, you do not directly own any foreign real estate. This means that you have no U.S. tax filing requirement.
How is RISE management aligned with their investors?
RISE investors will receive the first 8 percent pretax return every calendar year before management can qualify for a 20 percent performance bonus on the excess returns, which is paid to them as carried interest. Currently, management has $50M invested in the fund.
What is the minimum purchase amount?
Investors must subscribe for a minimum of 100 units.
Can I purchase RISE Properties Trust in my RRSP or TFSA?
Yes, the fund is eligible for RRSP, RESP, TFSA and LIRA.
How do I invest in this fund?
RISE is available to purchase through most investment advisors throughout Canada.