The Alternative & Direct Investment Securities Association, a trade association representing the non-traded alternative investment space, wrapped up its 2018 Spring Conference in Orlando, Florida which welcomed approximately 600 industry professionals. Among the educational topics discussed at the event were Section 1031 exchanges, tax reform, real estate investment trusts, business development companies, and more.
More than 90 professionals spoke and participated in educational sessions over the course of three days. Rudy Giuliani, 107th Mayor of New York City (1993 – 2001) was a keynote speaker at the event, along with Marilyn Mohrman-Gillis, executive director of the CFP Board Center for Financial Planning and best-selling author, executive business coach and world-renowned sales trainer Cheri Tree.
“The ADISA 2018 Spring Conference was a tremendous success and we thank everyone who attended and participated in what many consider to be the kick-off event of the year for alternative investments education,” said John Harrison, ADISA’s executive director. “Attendees get a significant amount of information, experience a range of viewpoints, and interact with each other.”
At the industry update session, Taylor Garrett with Mountain Dell Consulting reported on Section 1031 exchanges. Facts from the report included:
• In 2017, sponsors raised $1.94 billion total equity and fully subscribed 94 Section 1031 offerings
• Of the equity raised, multifamily properties accounted for 54 percent, while retail was closest behind at 19.2 percent, and office was third at 16.12 percent.
• Approximately $583 million has been raised thus far in 2018 and the outlook projects the total equity raise could reach $2.5 billon.
• The demand for multifamily offerings is expected to continue, and supply has reportedly kept up.
Also speaking at the industry update session was Mike Huisman with DST Systems Inc., who reported on interval funds, non-traded real estate investment trusts, daily net asset value REITs, and non-traded business development companies. Huisman reported that:
• Approximately 55 percent of the investors in these product types were new in 2017, while 45 percent were returning investors.
• The average age of the investor in our sector is 68 years old
• Ticket size is increasing in the IBD and RIA channel and decreasing in the wirehouse channel
• The number one move was to investors participating in daily NAV REITs.
As to the Impact on Commercial Real Estate session, Randy Anderson, Ph.D. with Griffin Capital Asset Management, reported that:
• Real estate fundamentals are strong with contractual rent growth in place and a tailwind from economic expansion.
• As a result of tax reform – potential GDP growth, which leads to employment growth, increases demand across all property types; and the deductibility of interest expenses and preservation of the 1031 exchange rule are very favorable for real estate. Additionally, the REIT structure still maintains a tax benefit over other structures.
“We are strongly looking forward to continuing the educational momentum at our two remaining events this year – the Alternative Investments Research & Due Diligence Forum in New York City this July and our 2018 Annual Conference & Trade Show in Las Vegas this October,” said Harrison.
ADISA’s 2018 Alternative Investments Research & Due Diligence Forum will be held July 10 – 11 at the New York Hilton Midtown. The association’s 2018 Annual Conference & Trade Show will be held October 8 – 10 at the ARIA Resort & Casino Las Vegas.
The Alternative & Direct Investment Securities Association bills itself as the nation’s largest trade association representing the non-traded alternative investment space. ADISA’s members are typically involved in non-traded real estate investment trusts, business development companies, master limited partnerships and private and public funds, 1031 exchange programs, energy and oil and gas interests, equipment leasing programs, or other alternative and direct investment offerings. The association was founded in 2003 and has approximately 4,000 members.