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Manmade Disasters & DSTs

October 9, 2019

Urbanization has gone terribly wrong up and down the West Coast.  Seattle, Portland, San Francisco and Los Angeles all suffer from the blight of homelessness and the detritus of human waste, drug paraphernalia, rodent infestations and communicable diseases (think rats and typhus) this brings in its wake.

All these cities have made a choice to tolerate vagrancy and encourage drug use with dire consequences.  “In San Francisco, the Emerald City of the Creative OZ, gazillionaires of Silicon Valley gaze down upon an empire caked with human feces.”  There is even a poop-app available to Bay Area residents so they can safely navigate the latest piles with the aid of their ubiquitous cell phones.

In Los Angeles, diseased rats (what other kind are there) swarm trash heaps the size of city blocks.  This then exposes first responders to infection from typhus and other medieval diseases.

In Portland, police routinely capitulate to masked and armed militias of woke revolutionaries.  Seattle tops the list with more homeless encampments than any other.  As such, King County law enforcement retirements far outstrip new hires.

What happened?  Single party rule and a concomitant decades long experiment in what happens when society stops enforcing bourgeois behavioral norms happened.  In the name of compassion, drug usage has been decriminalized and attendant support services for this lifestyle provided.  Taxpayer funded outreach programs provide food, shelter, free needles along with alcohol swabs and vitamin C to dissolve heroin and crack.  Instructions on how to tie your arm off to take a hit are also provided gratis.  This isn’t a homeless problem, it’s a drug problem.

However, as single party cities and states West Coast powers-that-be are not held accountable for the failure of their grand social experiment.  Instead, they turn a blind eye to the squalor and misery this creates and insist that the “rights” of the “homeless” continue to be elevated above those of the working public at a cost of billions of dollars, with nothing to show for it.

They won’t change because they don’t have to, therefore, you must.  This of course, assumes you are unwilling to stand idly by while a lifetimes worth of real property wealth is destroyed.  Fortunately, with Delaware Statutory Trust (DST) properties, investment property owners have a possible solution which provides them with historically unprecedented flexibility in terms of movement.

Heretofore, rental property owners were very much limited to what they could see and touch in terms of replacement property selection.  For better or worse it was difficult and dangerous to move outside the local market.  The advent of DSTs nearly 20 years ago in 1031 exchange has put paid to this.

Now accredited investment property owners can go anywhere they like geographically and invest in anything they want functionally.  They can escape the urban dystopias of the West Coast by leveraging up on the decade’s worth of commercial property acquisition, management and disposition experience of reputable companies. 

Having captured approximately 60% of the DST 1031 exchange (Bluevault Partners 10/11/2016) one reputable sponsor has devoted more energy and resources to this space than anyone else.  The breadth of their commercial property offerings:  multifamily, self-storage, medical, senior assisted living and hospitality reflects this.

With the West Coast having become a refuse strewn war zone between the haves and have-nots, rental property owners are foolish not to take advantage of this escape hatch.  There are still places and people which have not yet consigned bourgeois norms and the wealth this creates to the “dustbin of history.”

Disclaimer:

This material and views are prepared solely by the author and does not necessarily represent the views of the its affiliates. Statements concerning financial market trends are based on current market trend, which will fluctuate. Projections are inherently limited and should not be relied upon as an indicator of future results. Historical figures and performance are not indicative of future results. This is for informational purposes only and does not constitute an offer to buy or sell any investment.

DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of entire principal, declining market value, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated.

Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This information is not meant to be interpreted as tax or legal advice.  

Peregrine Private Capital | Lake Oswego
5000 Meadows Road, Suite 230
Lake Oswego, Oregon 97035
(503) 241-4949

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