FAQs

Answers to common questions.

FAQs

Most Common Questions

How do I earn a return on my investment?

To the extent returns are generated on any investment, they would be reflected through (i) distributions in the form of dividends, and (ii) potential appreciation in asset value. The timing and amount of an investor’s return is not guaranteed, and past performance is not indicative of future returns. Detailed information about our current offering is available at http://www.streitwise.com/oc.

What are the fees?

There is an upfront 3% fee and an ongoing 2% management fee, all taken out before your dividend distribution. For example, last quarter we distributed 10% annualized dividends to investors and that amount is net of fees, meaning fees were taken out beforehand.

Unlike some other REITs which charge up to 15% in the form of upfront fees, asset management fees, acquisition fees, disposition fees, financing fees, performance fees and other expenses, stREITwise has a simple and transparent fee model that results in much lower fees to our investors. This is the reason why we received the Best Fees Award by the Real Estate Crowdfund Review. Full details of our compensation and fees is included in our Offering Circular.

How often will I receive dividends, and at what rate?

We expect that we will declare and pay dividends on a quarterly basis, and that the dividend rate will be set at a level that we be believe will be consistent and sustainable over time. There can be no assurance as to when, if, and at what level, dividends will be paid as that is a decision our Board of Directors makes each quarter.

Since inception, we’ve delivered 10% annualized quarterly dividends with a future target of 8-10%. You can find more information on our historical dividends on the SEC’s website and in our Historical Performance.

 

What types of accounts does stREITwise support?

stREITwise supports investments from individuals, companies (corporations, LLCs, etc.), trusts, and self-directed IRAs or 401(k)s. Step-by-step instructions on how to enter your investment information can be found here:

Individuals
Companies
Trusts
Self-directed IRA or 401(k)

Is there a dividend reinvestment program?

Yes, once you are an investor you can opt in dividend reinvestment. To enroll in dividend reinvestment, follow these steps HERE.

For more information on DRIP, see Appendix C in the Offering Circular.

Can I invest through my IRA or 401(k)?

Generally, yes. You may make an investment through your IRA or other tax-deferred retirement account.

You should note that we are not undertaking to provide impartial advice or give you advice in a fiduciary capacity. However, your investment may be subject to our discretion to (i) not accept your IRA and other retirement account investment, or (ii) redeem your interest if, in either case, there is a material likelihood we would be deemed to be a fiduciary or be at risk of forfeiting our Real Estate Investment Trust tax status.

The Basics

What am I investing in?

stREITwise is an online real estate investment platform that aims to provide investors exposure to a portfolio of primarily cash flowing properties located in markets where we feel the risk-return characteristics are favorable. More information on the Offering can be found here.

What is stREITwise?

We are a real estate investment trust, whose goal is to provide a professionally managed, diversified portfolio consisting primarily of high-quality office properties. You can find detailed information about the REIT and determine whether this investment fits your personal investment and risk parameters by reviewing the detailed Offering Circular.

What makes stREITwise unique?

For as little as a $1,000 initial investment, stREITwise gives both accredited investors and unaccredited investors alike the ability to generate passive income through an investment in a diversified portfolio of institutional-quality real estate with an ultra-low cost structure.

Additionally, the stREITwise portfolio is directed by a team of seasoned real estate investment professionals who possess considerable real estate investing experience.  stREITwise’s founders have acquired and/or managed over $5.4 billion of real estate investments spanning all major property types.

Are you a platform? How do you compare to other real estate crowdfund companies?

We are not a platform, but a REIT that invests in a portfolio of stabilized, commercial office properties. To compare us to other REITs open to non-accredited investors, please see this page.

What's a REIT?

A Real Estate Investment Trust, or REIT, is a tax-advantaged company that owns income-producing properties and distributes the cash flow to investors in the form of dividends. Learn more about REITs here.

Why did you start stREITwise?

We started stREITwise because we saw an opportunity to provide access to institutional quality commercial real estate for both non-accredited and accredited investors alike, and were excited to be able bring new federal regulations and technology together to generate passive income for everyone.

Fees

What are the fees?

There is an upfront 3% fee and an ongoing 2% management fee, all taken out before your dividend distribution. For example, last quarter we distributed 10% annualized dividends to investors and that amount is net of fees, meaning fees were taken out beforehand.

Unlike some other REITs which charge up to 15% in the form of upfront fees, asset management fees, acquisition fees, disposition fees, financing fees, performance fees and other expenses, stREITwise has a simple and transparent fee model that results in much lower fees to our investors. This is the reason why we received the Best Fees Award by the Real Estate Crowdfund Review. Full details of our compensation and fees is included in our Offering Circular.

Of the amount I invest, how much is taken out for the 3% upfront fee?

Out of the up-front fees charged (3%), no amount will be taken out of the shares you’re purchasing. 97% of what you invested will go to the REIT & Operating Partnership as proceeds. The 3% up-front fee is used for offering and organization expenses. Your ownership at any given time is the NAV multiplied by the shares you own so you would own 100% of the proceeds assuming you have held your investment past the Redemption Fee Schedule.

Do you have a waterfall fee structure? Disposition fee? Advisory fee? Property management fee? Loan service fee? Aggregate real estate value fee? Any other hidden fees?

We just have the transparent 3% up-front and 2% ongoing management fee. For more information about those the dangers of those hidden fees see here.

Why do these fees seem higher than what competitors have advertised their fees as?

For competitors advertising 0 to 1% fees, you are investing in a platform that will often have hidden fees tacked on that aren’t advertised. With stREITwise, you are investing directly in the REIT so the fee is transparent and just includes the 3% up-front fee and 2% ongoing fee. When platforms actually invest in the selected REITs, they pay out 3rd party fees that are hidden from investors and the total fees can often surpass ours. An example of hidden fees that others charge are management waterfall fees that split profits, advisory fees, property management fees, loan service fees, fee on aggregate real estate value, and disposition fees.

The Real Estate Crowdfund Review did an independent comparison of the fees of stREITwise and those competitors and rated us as having the Best Fees due to the transparent structure.

Dividend / Returns

How often will I receive dividends, and at what rate?

We expect that we will declare and pay dividends on a quarterly basis, and that the dividend rate will be set at a level that we be believe will be consistent and sustainable over time. There can be no assurance as to when, if, and at what level, dividends will be paid as that is a decision our Board of Directors makes each quarter.

Since inception, we’ve delivered 10% annualized quarterly dividends. You can find more information on our historical dividends on the SEC’s website and in our Historical Performance.

How do I earn a return on my investment?

To the extent returns are generated on any investment, they would be reflected through (i) distributions in the form of dividends, and (ii) potential appreciation in asset value. The timing and amount of an investor’s return is not guaranteed, and past performance is not indicative of future returns. Detailed information about our current offering is available at http://www.streitwise.com/oc.

How are dividends distributed?

Dividends can be sent by physical check or transferred directly into the bank account you specify in your Investor Center.

Will you be retaining any funds from operations or do you plan to distribute them all to be able to pay out the dividend?

So far, the dividend distribution has come from free cash flow, but we cannot guarantee we will be able to maintain this level of dividend, nor can we guarantee any sort of return.

Your website states 10% dividends quarterly. How much will I earn every quarter on this money?

While we cannot guarantee any future performance, our most recent dividend equated to a 10% annualized dividend. You can find all the details in our Offering Circular here. If such dividend were achieved in the future, a $1,000 investment would provide $100 of annual dividends, or $25 per quarter.

Security & Risk

Are there risks?

Yes, there are risks. Similar to any investment, there is no guarantee of a return of principal or any return thereon. The real estate market is cyclical and it is difficult to know how and when the market will change.

The stREITwise principals have over 40 years of combined real estate investing experience and over $5.4 billion in transactions, across market cycles.

How is my personal information kept secure?

All investment documents are processed electronically on our website through technology and stock transfer agent services provided by FundAmerica and Computershare. These are both established and secure SEC-compliant platforms. This allows for an efficient and seamless investment process, while ensuring the authenticity and security of your information. Once your investment is processed and funds are received, you will be emailed a confirmation and your subscription agreement.

Is there bankruptcy protection like other crowdfunded REITs?

We are not a platform in the vein of most of the other online crowdfunding sites. An investment in 1st stREIT Office, Inc., is a direct investment in a REIT operating under the direction of the Board of Directors, who are the principals of our sponsor, Tryperion Partners AND stREITwise. We are not investing or administering investment in properties managed by unaffiliated third-parties. We are real estate investors first, using stREITwise as a means of raising capital, not a technology platform to raise money to invest in other groups’ real estate investments.

What that means in terms of bankruptcy protection is that there is no “site” that can go bankrupt through which you would lose the ability to administer the investment. The risk that your investment would be subject to a bankruptcy would apply to a bankruptcy of the REIT itself or the Manager/Sponsor, in which case a standard market bankruptcy process would apply. Shareholders have the ability to vote on the Board of Directors of the REIT as outlined throughout the circular (with respect to your question, not limited to Bankruptcy only).

How much skin in the game do the founders have?

The three founding partners of stREITwise have a total of over 500,000 shares ($5 million total) invested in the REIT. You can see more about our founding partners here.

Why do you need my Social Security number and date of birth?

Investments through stREITwise must be reported to the Internal Revenue Service and be cleared for anti-money laundering checks. As such, we are required to obtain your social security number and date of birth to process the investment.

Hypothetically, could stREITwise earn enough in fees and continue to operate as intended over the long haul if it were to never issue any more than the shares?

stREITwise is owned by the principals of Tryperion Partners, LLC (the REIT’s Sponsor), and engages a wholly-owned subsidiary of the Sponsor to manage 1st stREIT Office, Inc. Tryperion was founded in 2013 and is a private real estate investment firm that provides investment management services to a range of foundation and high net worth clients. As such, managing stREITwise and its REITs are not a standalone source of income. Rather, it is an extension, under a different brand/umbrella/structure, so that we can expand the breadth of investors beyond accredited investors exclusively. That’s why we’re able to run and fund stREITwise without taking outside capital, it’s an extension of an existing business. I will also add that we don’t only have the shares sold through 1st stREIT Office Inc under management, but also 2,070,000 operating partnership units, which are combined with the REIT shares under management for total assets in the stREITwise umbrella.

Tax Considerations

What are the tax advantages?

There are several tax advantages to investing in REITs that aren’t available with other invest-able companies:

  1. Pass-through deductions: REIT investors can deduct up to 20% of their dividends.
  2. No double taxation: REITs are not taxed at the corporate level which avoids the “double-taxation” of corporate tax and personal income tax.
  3. Depreciation: Allows you to reclassify certain dividends from “ordinary income” to “return of capital”.

For more information on the tax benefits of REIT investing click here.

 

Will the dividends I receive be taxable as ordinary income?

Unless your investment is held in a qualified tax-exempt account, your dividends will generally have tax implications. Dividends will typically come in three forms – (i) return of capital dividends (which are generally not taxed and instead reduce your tax basis for future capital gain consideration), (ii) capital gain dividends (which are generally taxable at long-term capital gain rates), or dividends from current or accumulated earnings or profits (which are generally taxed at ordinary income rates). However, because each investor’s tax considerations are different, we recommend that you consult with your tax advisor.

When will I get my tax documents?

Your Form 1099-DIV tax information, if required, will be provided by January 31 of the year following each taxable year.

What is a Form 1099-DIV?

IRS Form 1099-DIV is sent to investors annually and provides the tax character of any distributions (dividends and any other distributions) paid to you during the tax year.

I have more tax-specific questions and need advice.

We cannot provide tax advice, so we’d recommend if you have any questions about reporting your 1099-DIV provided by 1st stREIT Office please contact your tax advisor. In general, pursuant to the 2017 tax reform a 20% reduction is applicable for REIT dividends. The remainder is taxed at the taxpayer’s marginal income tax rates.

Liquidation

When can I redeem my investment?

There is a 1 year lockout, then you will have a quarterly option to participate in our Stockholder Redemption Plan, subject to certain restrictions that are fully explained in the Stockholder Redemption Plan of the Offering Circular.

What is the length of the investment?

You will be able to redeem your shares after one year through our share redemption program and subject to certain restrictions that are more fully described in our Offering Circular here. However, we encourage all investors to take a long term approach to their investment with stREITwise.

Is there any time limitation for the fund period?

There is no stated term on the investments/the REIT, but as each of our investments reach what we believe to be its optimum value during the expected life of the Company, we will consider disposing of the investment and may do so for the purpose of either distributing the net sale proceeds to our stockholders or investing the proceeds in other assets that we believe may produce a higher overall future return to our stockholders. We anticipate that any such dispositions typically would occur during the period within approximately ten years from the termination of this offering (subject to pursuing alternative means of providing liquidity). You can find additional details on the disposition policies in the Offering Circular by searching for Disposition Policies.

Offering Details

Are you looking for more deals to fund?

Right now the REIT consists of an office park in St. Louis featuring the Panera Bread headquarters and an office in Carmel, Indianapolis. We are currently actively pursuing additional properties. We do intend on acquiring, over time, a diversified portfolio of quality office properties.

Is this an equity REIT?

Yes.

Does my investment go towards buildings in the portfolio only or will it be allocated to all future real estate purchases as well?

An investment in the REIT means an ownership interest in all currently owned properties as well as all future acquisitions.

What future projects are in the pipeline to purchase?

While we cannot describe the pipeline in detail given the preliminary nature of the opportunities, we are currently seeing a pipeline to acquire high quality office properties in markets where we feel that the risk-return characteristics are favorable. We do intend on acquiring, over time, a diversified portfolio of quality office properties.

Do you have the CUSIP number for this REIT?

33622A 106

What assets under management (AUM) are in the REIT right now?

Right now the REIT consists of an office park in St. Louis featuring the Panera Bread headquarters and an office in Carmel, Indianapolis. We are currently actively pursuing additional properties. We do intend on acquiring, over time, a diversified portfolio of quality office properties. You can get more details about what’s in our Current Offering here.

What is the leverage on the properties?

You can find a detailed understanding of how we approach leverage in our Offering Circular. As a good place to start, I will point you to Q&A p.5: “Our targeted portfolio-wide leverage, after we have acquired a substantial portfolio, is between 40-60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets.

During the period when we are acquiring our initial portfolio, we may employ greater leverage on individual assets (which will also result in greater leverage of the interim portfolio) in order to quickly build a diversified portfolio of assets. Our Manager may from time to time modify our leverage policy in its discretion.” Please see “Investment Objectives and Strategy” for more details.

Does the fund have a waterfall structure?

It’s not a waterfall structure. Just the fees listing in the Offering Circular which are the upfront fee and the asset management fee.

Do you send out periodic statements of profitability and new acquisitions?

Financial and acquisition updates are filed with the SEC and can be found on the EDGAR website.

How do you underwrite your deals?

For underwriting, we do complete underwriting internally. Our focus is on downside protection, vetting tenants ability to pay, understanding the submarket and the ability to backfill vacancies as they may arise, any physical needs of the building, among many other factors.

Want to learn more before investing?

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