Alternative Investments/CRE 2025 Outlook Part 2

We looked at Alternative Investments/ Commercial Real Estate 2025 Outlook Part 1 in our last post.   We will review self-storage, student housing, multifamily, and senior housing in that post. We will continue is Office, Medical Office, Industrial in this writing. 

February 13, 2025

By Al DiNicola, AIF®
DST 1031 Specialist & Alternative Real Estate Advisor
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC

Retail, Life Science, Data Center and technology will be future featured articles. To access the previous post, click here. Alternative Investments/CRE 2025 Outlook Part 1 – DST Education and Market News

Office

There is a move in many sectors to increase office attendance. We have recently seen this on a federal level for a number of philosophical, financial and potential political reasons. The private sector companies have also begun to require in-person employees. These are in the form of mandates. Stay tuned to see if this strategy will work and create increased productivity.

Underperforming assets is the focus of discussion. Property owners may consider conversion into other uses (if local ordinances approve). Conversion into alternative uses may solve other demand for assets in some areas. Older buildings with high vacancy rates may simply not have the required demands of certain tenants.  Recently an insurance company in Chicago vacated a much larger building and moved into a 40% smaller building.  While there was a loss of rental space the rents were higher in the newer building, that provided better functionality and use for the employee.  Better use may translate to more productivity.  Tenants are demanding top tier properties.

There is also limited new construction created by a combination of higher interest rates and increased construction cost.  Properties that can be delivered quickly (with tenant improvements) and quicker occupancy should be very appealing in many markets.

Many of the Delaware Statutory Trust (DST) offerings have been large credit tenants repositioning their real estate owned as a sale lease back. The sale enables the company access to cash for upgrading facilities, equipment or expansion.  The long lease terms and triple net feature of the DST offering are advantageous to investors.

Typically, all real estate is local. On a national level the office vacancy rate hit a record high of 17.7% in 2024 and is projected to rise another 100 basis points, to near 19% by the end of 2025 (according to CBRE).

Some of the other points are:

  • Lease Rates: Asking rents have risen steadily post-COVID, their rate of growth is expected to remain below 1% with isolated new development.
  • Limited tenant demand for older buildings with fewer amenities is forcing owners to begin dropping rates to draw interest.
  • Net absorption is anticipated to stay flat over the near term as the nation’s uneven recovery unfolds. Demand will likely stagnate in the first half of the year as companies cautiously evaluate economic conditions and federal policy shifts under the new administration.
  • New construction starts will remain on hold, hindered by elevated labor and material costs and subdued demand.

Medical Office Building is much different than Office.

CBRE forecasts that MOB asking rents will rise by up to 1.8% in each of 2025 and 2026 and vacancies will decline slightly to 9.46% by the end of 2025 from 9.57% in this year’s third quarter. There is a growing demand for healthcare services including outpatient surgery centers. This market is also being fueled by the demographic indicators of baby boomers. There will be more and more demand, which is good news for investors.

The are many types of facilities including doctors’ offices, clinics, urgent care centers as well as buildings associated with hospitals. Some of the centers being offered as DST are smaller in size and may be all cash offerings rather than having any debt.

One of the other interesting factors is the rise in employment in the healthcare sector. This sector outpaced the overall growth rate.  Healthcare job growth continued to be an economic driver in 2024, creating 686,600 jobs over the 12-month span and accounting for 31% of the 2.2 million jobs created in the overall economy last year. (Healthcare Powered U.S. Job Growth in 2024 | Health Leaders Media)

Additionally, MOB sales volume increased to $2.51 billion in 2024’s third quarter, up 48% from a year earlier. That marked the second consecutive year-over-year increase following nearly two years of declines. DST offerings were limited in scope and tended to be all cash offerings.  This may create a challenge for investors executing a 1031 tax deferred exchange with a debt replacement requirement.

There continues to be interest in the Industrial Asset class

Large fulfillment centers and last mile destination centers are still in demand. Not only is amazon still building but there are also other large distribution centers being developed for automakers. There are also smaller warehouses (such as flex spaces) that may be bigger opportunities.  Developers are delivering additional small offerings to satisfy the demand. The construction starts are expected by late 2025. This will be only in markets where the supply and demand balance has returned. Construction costs, interest rates and potential regulatory issues may delay some projects.

A few years ago, the Supply Chain issue surrounded many aspects of the economy. Much has ease since COVID.  However, it is projected there will be pressures and risks, disruptions, delays, and high costs will continue. In 2025, last-mile delivery solutions will be crucial to boosting agility by ensuring more reliable deliveries. More companies will adopt route optimization strategies and crowdsourced delivery networks to improve the last mile and adapt to unexpected delays, making the supply chain more resilient and flexible.

There is a continued effort to ease supply chain issues with near shoring & re-shoring. This is an attempt to get more product “On Shore” meaning in the USA.  This also is a good indicator for the industrial sector.  The new administration has a mission to bring more manufacturing back to the USA. Another good long-term sign for industrial. The DST industrial offerings over the past two years have nearly outpaced the multifamily offerings in numbers of offerings as well as volume of offerings. Some industrial offerings may be small bay flex spaces to one million square feet of auto parts distribution warehouses. However, as of February 2025 the available industrial DST offerings have decreased, indicating active investor interest as well as directing investment dollars to this asset class.

We want to thank many of the sponsors who have provided 2024 and 2025 analysis including Inland-Investments, Capital Square, Cantor Fitzgerald, Brookfield, Starwood, CBRE, and others.

NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.

DSTs are not for all investors.  The acquisition of a DST is for accredited investors only.  Contact your investment adviser for additional details on how a DST may be a solution to your 1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC 1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.

This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus.  Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all of your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.   NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our corporate office is located at 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 8215 SW Tualatin- Sherwood Rd, Suite 200, Tualatin, OR 97062.  MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.

Thank you.

Alternative Investments/CRE 2025 Outlook Part 1

Our last post mentioned “Real Estate Groundhog Day” and   potential repetitive cycle often experienced in the real estate industry. We mentioned market cycles, buyer and seller behavior, agent routines, and seasonal trends. Understanding the trends in asset classes help advisors and investors focus on the right due diligence elements.

February 10, 2025

By Al DiNicola, AIF®
DST 1031 Specialist
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC

Understanding the trends in asset classes help advisors and investors focus on the right due diligence elements. You can access the last article here. Alternative Investments and CRE 2025 Ground Hog Day – DST Education and Market News

The overall concerns may last for more than 2025 and include:

  • the wall of debt maturities in commercial loans
  • Affordability of real estate
  • Migration Patterns
  • Supply and Demand Dynamics Across High-Conviction Sectors

We will review self-storage, student housing, multifamily, and senior housing in this writing.

Self-Storage

The pandemic created a list of dynamics that created an enormous impedance prompting people to shift where they wanted to live and ultimately work. The shift in housing demand created an increased demand for storage. Rents for storage for both individual units and facilities increased drastically from 2020 to 2022. The trend did slow down and reversed itself. Some analysist pointed to the interest rates spiking. Storage rents declined significantly in certain areas.  This resulted in underperformance in the sector. There were pandemic era gains but much of the gain has now been given back. The good news is that the self-storage asset class may benefit from the stable demographic demand going forward. Here are some of those demographics.

• There are life events that will prompt relocating or downsizing your living accommodations. These include job change, divorce, marriage (or moving in together and yes even death of one of the partners or spouses.

 • The millennials are reaching peak home ownership time period (if they can afford it) and there are still many baby boomers entering retirement.

 • New supply of facilities is slowly declining after a large increase. This increase started before the pandemic from 2018 to 2020.  Immediately after the pandemic the migrations prompted additional supply to come on the market that now is slowly being absorbed.

 • If (and when) interest rates and inflation come down this may prompt an increase in housing transactions. There is the forecast for an increase household formation by millennials which may see additional demand for self-storage.

 • The potential for rent growth in 2025 may be realized by a demographic shift in housing needs. Some experts state we are 4 million housing units short. An additional factor will be the supply of self-storage stabilizing.

Student Housing

The big question may be is there still enough college age population. There was an old saying about making too many mouse traps if you did not count the mice. Most residential asset classes will have challenges including demographic (millennials getting older), overall interest and cost for higher educations. However, top tier colleges and universities still have an appeal.  Schools in Power 5 conferences and others with robust athletic programs, facilities, and educational reputations have continued to see stable growth.

 • Year over year certain schools have stable or application increases. This is despite the overall enrollment shrinking.

• according to Axiometrics Approximately 31,000 students per year through 2027 expected to enroll at top-tier universities.

  • According the Yardi “New supply of student housing has been dropping, with        35,703 off-campus, dedicated student housing beds completed in 2024, down from 44,746 beds delivered in 2023. Over the next several years, Yardi Matrix projects supply will continue to fall to 32,100 beds in 2025 and 33,995 beds in 2026. Recent updates brought down new bed counts in 2024 and 2025 as completion dates were updated”.

 • International students still consider the U.S. schools to be the number one destination. • What does not get a lot of attention is the number of school closings. In 2024 it is estimated that one school a week has closed.  Granted many of these schools may be offering degrees that have limited appeal or potential students do not find the overall education experience as positive. In the past ten years it is estimated that 726 degree granting post-secondary institutions have closed. Many of these closing was due to declining enrollment resulting in financial struggles.

Multifamily

The drivers and outlook for many of the residential offerings may be the lack of new construction starts.  After COVID there was an aggressive construction effort to build many multifamily units. By mid-2025 much of that supply should be absorbed. The multifamily sectors as well as the build for rents and manufacture homes will benefit from the supply pipeline slowing down,

• Traditional homeownership is challenging today with the high interest rates as ewll as the high housing process. For many renting will be the option either by necessity or desire.

 • COVID prompted many to seek working from home. There appears to be a move from the downtown markets that provide ample room to work from home and potentially afford space to start a family (in the case of millennials).

• Analyst will look at the construction pipeline, meaning how many units are under construction and be delivered in the next six quarters.  Meaning units in the pipeline at the start of 2024 will be delivered mid-2025. There will be a sharp decline in deliveries. This is good news for investors.

• Rent growth has been flat over the past 18 months.  This is caused in part by the the delivery of new units coming on the market.  In a proforma typical developers will estimate expenses growing by 3% and rents by 5%.  This has not happened.  Rents have been flat and expenses even staying the same (some have increases) put a strain on the NOI. Limited construction starts.

 • There are multiple generations who prefer “just a little more space”. The build-to-rent properties are poised to benefit.

Senior Housing

Senior housing demand is strengthened by the aging U.S. population and a considerable shortage in senior housing communities.

• As baby boomers reach their mid-70s, an increasing need for housing options that better suit them will emerge.

  • Construction costs continue to rise and building code requirements create challenges. The big question will be, can enough supply be delivered. Based on the need and the tremendous growth after the pandemic rent growth should do well. There are estimates there will be a need for 600,000 units by 2030.

• The baby boomer generations (by most accounts) hold more than 50 percent of the nation’s wealth. There is a focus on developing high-quality senior housing options that may attract baby boomers. There would be a need to have with high-end amenities and a sense of community to attract baby boomers as they age.

• The challenge may be with the lack of construction starts. There is a severe shortage of senior housing units and when supply is limited the demand for units will create strong fundamentals going forward. There is a comparison to limited supply experienced after The Great Financial Crisis reoccurring.

Effects on DST Offerings

All of the same analysis of asset classes with traditional CRE apply to Delaware Statutory Trust (DST). By structure individual investors secure DST investments with non-recourse debt (if the DST has leverage). Recently with the increase in interest rates DST has been structured with less leverage or all cash offerings.  This may create a challenge for investors utilizing a 1031 with require debt replacement to fully comply with the exchange requirements.  

We will continue in Part Two with office, medical office (MOB), industrial, and Life Science.

We want to thank many of the sponsors who have provided 2024 and 2025 analysis including Inland-Investments, Capital Square, Cantor Fitzgerald, Brookfield, Starwood and others.

NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.

DSTs are not for all investors.  The acquisition of a DST is for accredited investors only.  Contact your investment adviser for additional details on how a DST may be a solution to your 1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC 1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.

This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus.  Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all of your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.   NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our corporate office is located at 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 8215 SW Tualatin- Sherwood Rd, Suite 200, Tualatin, OR 97062.  MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.

Thank you.

Alternative Investments and CRE 2025 Ground Hog Day

The traditional holiday known as Ground Hog Day (celebrated Feb 2 annually) is more of a folk lore event rather than an actual weather prediction. As a side note, in case you missed Punxsutawney Phil this year the groundhog (actually a woodchuck) saw his shadow and predicted 6 more weeks of winter. 

February 7, 2025

By Al DiNicola, AIF®
DST 1031 Specialist
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC

Phil, over the years, is right 40% of the time. Commercial Real Estate forecasting may have a better percentage in predictions.

During the month of January and spilling into February commercial real estate practitioners, financial advisors and real estate investors attend multiple Webinars reviewing 2024 and looking toward predictions for 2025. Is there a real estate ground hog day?

You may remember the 1993 movie called Groundhog Day. In this comical movie a man (played by actor Bill Murray) relives the same day over and over again. Because of the movie, the phrase “Groundhog Day” is now often used to describe repetitive, monotonous situations.

“Real Estate Groundhog Day” is not a widely recognized term, but it could refer to the repetitive cycle often experienced in the real estate industry. This could include:

  • Market Cycles – The recurring patterns of boom and bust in real estate markets, where property values rise and fall in predictable cycles.
  • Buyer’s and Seller’s Behavior – The repetitive nature of buyer hesitations, seller expectations, and negotiation tactics that agents deal with regularly.
  • Agent Routine – Real estate professionals often feel like they are reliving the same tasks daily, such as prospecting, showing homes, negotiating deals, and handling paperwork.
  • Seasonal Trends – The real estate market tends to follow seasonal patterns, with increased activity in spring and summer and slowdowns in fall and winter.

2025 Commercial Real Estate and Alternative Real Estate Outlook

For investment advisors and representatives we do experience cycles and compare and contracts past trends to establish some type of predicative future.  Many look to cause and effect in the markets.

Many of the same takeaways in the commercial real estate analysis can transfer to the Delaware Statutory Trust (DST) investment opportunities, Opportunity Zones as well as the direction of private equity into real estate development. Private equity as well as individual investors are moving into the alternative real estate space for a variety of reason.

Many of the sessions we have attended provide the same key takeaways:

  • With the second largest drawdown of CRE valuations on record, a compelling entry point is on full display.
  • Looming debt maturities and stressed capital structures will support significant opportunity for well-capitalized buyers.
  • Slower economic growth will drive more focus on the intersection between real estate and demographic trends.
  • Housing affordability, migration patterns, and immigration policy will be critical trends to consider when making investment decisions.
  • Construction starts are down significantly across commercial real estate, setting up for strong fundamentals.

Wall of Debt Maturities 

The massive transaction volume from 2021 to 2023 created a great deal of debt to go with it. Much of the debt originated between 2019 and 2022 will be coming due in the next 12 to 24 months.

Affordability

Housing affordability will drive residential rental demand. Despite an increase in mortgage rates, the Case-Shiller Home Price Index is at an all-time high. This is driven by the continued demographic demand for housing, coupled with an extremely low supply of existing homes for sale.

Migration Patterns

Both domestic population migration between states and immigration from abroad will have an outsized impact on commercial real estate demand going forward, especially as organic growth from births continues to wane. It is estimated that 75 percent of population growth in the next decade will come from immigration. The profile of potential renters will also vary significantly depending on the migration timing a market experiences. International migration is concentrated on a few key states, with Florida, California, and Texas receiving the largest share.

Supply and Demand Dynamics Across High-Conviction Sectors.

The demographic backdrop will drive supply/demand dynamics for commercial real estate throughout the next decade. Given the slow-growth macroeconomic environment, the strongest real estate sectors will be those whose demand is tethered to life events rather than economic growth. Those same real estate sectors also benefited from the low interest rates of 2020 to 2022, seeing a boom in construction starts during that time period.

Interest rates seem to be a topic of discussion by many and look towards a trend lower.  However the market with make a move with or without significant changes. Seller of actively managed real estate will seek to move into passive management.  Investors with capital gains will continue to seek tax deferral through 1031 tax deferred exchanges (some utilizing DST for passive income and tax deferral). Other investors with capital gains may seek to invest into Opportunity Zones for long term compounding potential returns.

Over the next few weeks, we will provide a review into specific asset classes and the projection.  Will we repeat the same results as 2024, or will this year see appreciable improvements in the markets?

We want to thank many of the sponsors who have provided 2024 and 2025 analysis including Inland-Investments, Capital Square, Cantor Fitzgerald, Brookfield, Starwood and others.

NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.

DSTs are not for all investors.  The acquisition of a DST is for accredited investors only.  Contact your investment adviser for additional details on how a DST may be a solution to your 1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC 1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.

This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus.  Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all of your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.   NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our corporate office is located at 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 8215 SW Tualatin- Sherwood Rd, Suite 200, Tualatin, OR 97062.  MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.

Thank you.

CRE Market Update 2025 and 1031 Exchange Trends ~ Part 2

There was much anticipation, during the previous administration, that the long-standing Section 1031 tax deferred exchange provision would see changes. There were several proposals, from elimination (of what some referenced §1031 a loophole), to limiting the exchange dollar limits, to other strategies, none of which came to fruition. 

January 27, 2024

By Al DiNicola, AIF®
DST 1031 Specialist
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC

We have previously written about the reasons why. Advisors, CPAs, real estate professionals and most importantly the individual investors feel comfortable the program will stay intact, at least we are hopeful.

In Part 1 we commented on real estate prediction, interest rate changes, financing, inventory supply, asset classes and short-term rental in certain areas. (See   Part 1 – 2025 CRE Trends). We will address a few other areas and amplify. 

Can you Refinance? There continues to be concerns regarding the ability of investors (especially large investors) to refinance maturing lower rate loans to higher interest rates. We have heard of the projected number of loans maturing over the next two years. The estimates range from $700M to $2 Trillion depending on the source and interpretation of the data. No matter what the dollar amount will be, the individual investor will be focused on how to reposition their asset either through refinancing or reselling.

A lot of that will be determined by the banks that are holding the loans. Some analysts have often used the phrase “extend and pretend” but some banks may potentially use some of the same strategies. In banking, the term “extend and pretend” refers to a practice where banks or lenders extend the terms of a loan (i.e., by lengthening the repayment period or restructuring it) instead of addressing underlying issues, such as the borrower’s inability to repay. This is often done to avoid recognizing a loan as non-performing or impaired on the bank’s balance sheet, which could require the bank to set aside additional reserves or take a loss. 

There may be an increase in the volume of activity simply based on the fact that there are maturing loans, and some investors want to get out from under the loans. The challenge many investors will face when doing a §1031 exchange is that the loans that are being paid off need to be replaced in order to have a valid §1031 exchange unless the investor can provide fresh cash in place of a mortgage. Delaware Statutory Trusts (DSTs) may assist certain investors with debt being replaced with non-recourse loans.

Interest Rates and Transaction Volume

A reduction in a few basis points in interest rates is expected to boost 1031 transaction volume. This may push an upward trend in residential and commercial exchanges. Investors evaluating making moves may focus on tax deferral as well as NOI or distributions being paid.

Seller Financing

Traditional financing challenges will lead to more seller-financed transactions. This may become problematic with sellers leveraging §1031 Exchanges. We will follow up with another article on the benefits and drawbacks of seller financing.

Shifts in Asset Classes

Multifamily, industrial, self-storage, and certain necessary retail properties are expected to see robust activity as investors use §1031 Exchanges to defer taxes. Certain investors may move from one asset class to another.  Investors utilizing DST may have an advantage in selecting several asset types and geographic locations as replacement properties.  This diversification spreads the risk of real estate over a greater number of properties.  For example, an investor selling a residential rental property for $500,000 may acquire 3-5 different DSTs (typically $100,000 minimum in a DST) and assemble a portfolio of real estate rather than one property. If the relinquished $500,000 property has debt, the DSTs provide non-recourse debt which may be viewed by investors as favorable.

Shift to Passive Investments

Investor demographics continue to suggest a move away from active management. An increase in management-intensive properties being exchanged for passive investment types like NNN (Triple Net Lease) and DSTs is expected.

Geographical Shifts

Local regulations may restrict the rental of certain real estate.  New policies and zoning regulation may change the number of rentals per year or per month (as in the case of Airbnb investors) that will prompt investors to move their investments to more landlord-friendly areas.

The need for more housing

In many locations there is a movement for permitting Additional Dwelling Units (ADU). The need for residential units in many locations has prompted municipalities to seek alternatives such as permitting ADU to be added to existing properties.  A single-family home may have enough room to build a smaller home or garage/carriage home on the same property. Hence the name additional dwelling unit (on the same property).  The increase in unit counts may prompt investors to look at §1031 opportunities. There may also be a combination of mixing commercial with residential offerings known as Mixed-use.  This diversification may appeal to a variety of investors, especially those seeking §1031 Exchanges.

Location, Location

The migration of people and to certain extent investment dollars are moving to the southern smile states (as they are known). These are known as retirement-friendly areas. Rumors of warmer weather (although maybe not in the southeast in January 2025), lower cost of living, favorable tax conditions, and areas friendly to retirees, continue to be in demand for investors.

2025 may be a fluid year with opportunities for investors. Potential legislative changes, market dynamics, interest rates, net operating income and other strategies are trends we will continue to monitor. The DST strategy as well as Opportunity Zones should continue to be of interest to advisors as well as investors. Another trend to watch is the IRA to ROTH conversion strategy.

NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.

DSTs are not for all investors.  The acquisition of a DST is for accredited investors only.  Contact your investment adviser for additional details on how a DST may be a solution to your 1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC 1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.

This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus.  Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all of your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.   NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our corporate office is located at 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 8215 SW Tualatin- Sherwood Rd, Suite 200, Tualatin, OR 97062.  MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.

Thank you.