REVA Offers North Carolina 1031 Exchange Office Investment

Real Estate Value Advisors is offering a crowdfunding investment as a 1031 exchange. The asset, known as Colonnade II, is one of the largest crowdfunded real estate investment offerings ever.

REVA is partnering with EarlyShares, a Florida-based firm in the real estate crowdfunding industry, to launch the 1031 exchange-eligible investment offering.

The REVA Raleigh Colonnade DST offering through EarlyShares is structured as a 1031 exchange, which allows investors to defer capital gains taxes and utilize 100 percent of their investment, rather than paying as much as 30 percent of the investment income to taxes.

Colonnade II is a class A office building in the Six Forks area of Raleigh. The 126,926-square-foot, five-story building was completed in 2008, and is fully leased to Salix Pharmaceuticals, which has occupied the building since 2011. The property, is within close proximity to executive housing and shopping amenities, and was acquired by REVA in January for a purchase price of $27.45 million.

REVA managing director Steve Sadler said the current lease has a strong upside, with in-place rates 20 percent below market. “We’re confident that this property will deliver the strong cash flow that investors have come to expect from REVA in both rising markets and falling ones,” Sadler said.

REVA, which has completed more than $200 million in Reg D syndications of commercial office buildings, projects an estimated investor internal rate of return of 9.86 percent to 16.4 percent, with an estimated cash-on-cash return of 7.5 percent to 8.5 percent. Accredited investors who are registered users of EarlyShares can invest in the Colonnade II with a minimum investment of $53,750.

REVA serves nearly 400 investors while stewarding a portfolio of nearly $1 billion in assets stretching from the upper Mid-Atlantic region to the Florida coast and west to Georgia and Texas.