1031 Exchange Investors Embrace Monetized Residential Real Estate
The Georgia-based start-up launched its new investment product, a play off the sale-leaseback concept marketed to traditional commercial property investors, earlier this year. The Company has become a market leader in triple-net leasing corporate housing, finding a niche for itself on the cutting edge of residential real estate. Since then the company has begun the process of expanding into the student housing and boutique hotel markets.
A sale-leaseback is a relatively new concept in residential real estate investing. Most investors have likely never heard of it for that reason, but Mt. Royal Vacations believes the idea has a big future. It gives the Company an explosive growth strategy and delivers long-term (10-year) lease payments to the investor, delivering a cap rate in the 8.5 to 10.0 percent range. Once the properties are leased back by Mt. Royal Vacations, they are outfitted and rented on an on-going basis to the Company's corporate housing clients, which drives a significant ROI. During the course of the lease, the new owner has no management or maintenance responsibilities, and the tenant pays for insurance and property taxes — resulting in a true, triple-net leased, hands-off investment for the new owner.
However, Mt. Royal Vacations isn't alone in its sale-leaseback of real estate assets. In recent years, many companies have been reconsidering their real estate strategies. In many cases, monetizing real estate assets is either part of an effort to unlock shareholder value in existing assets or to provide growth capital. Increasingly, activist investors are driving these pressures. Whatever the method, in a healthy real estate market, these types of transactions can broaden investment opportunities for those investors (particularly activist investors) seeking yields that are backed by hard assets.
Today, corporate housing is a full-fledged, lodging solution for everyday individuals who need short-term housing that has the space and convenience of a home on the road.
Some examples of today's corporate housing tenants include:
· Visiting professors
· Legislators and lobbyists
· Displaced families dealing with insurance issues like floods, fires, mold, and natural disasters
· Traveling medical professionals
· Patients seeking medical treatment
· Families involved in corporate relocation
· Professional athletes and entertainers
Some examples of Mt Royal Current investment offers can be received by emailing: