Real Assets Adviser

January 1, 2018: Vol. 5, Number 1

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From the Current Issue

How to invest in mixed-use real estate projects

Mixed-use implies real estate assets that include a meaningful component of three or more land uses in the same or adjoining structures. The most common recent vintage mixed-use assets include residential, retail and parking. The most complex mixed-use assets will often include office and hospitality, sometimes stacked vertically like the proverbial wedding cake.

Investor to investor: How the secondary market is serving RIAs and broker/dealers

Liquidity, or rather the lack of it, is a challenge to a wide-range of stakeholders involved in providing services to investors. This holds especially true for alternative investments that normally are not listed on the major stock, bond and commodity exchanges. The advent of secondary-market platforms for alternative investments injected liquidity where once it was lacking, including the markets for private equity, private debt and private/unlisted REITs, among many others. These are areas where registered investment advisers and broker/dealers spend much of their time and energy.

The hybrid investor: Jeff Rosenthal, CEO of Triad Advisors, argues that real power for wealth advisory firms comes from being a house undivided

When Jeff Rosenthal was named president and CEO of Triad Advisors on Jan. 1, 2016, company co-founder and outgoing CEO Mark Mettelman announced that it was an opportune time to pass the torch to a new generation of leaders as part of the next stage of Triad’s development. Mettelman, who simultaneously transitioned to the role of chairman, went on to say that Rosenthal embodied that leadership because he had earned the respect and trust of the organization’s affiliated advisers, has a passion for service, and possesses a deep understanding of the wealth advisory industry.

What next for dead malls: There are new uses for defunct shopping centers that can benefit investors and real estate developers

It is no secret that the retail sector is being buffeted by headwinds, crosswinds and, on occasion, tailwinds. The result is easily seen in the headlines, with at least 19 major retailers — including such iconic names as The Limited, Payless, RadioShack and Toys R Us — filing for bankruptcy protection in 2017. When anchor retailers fail, malls that house them are also in danger of failing. However, unlike the retailers, who only need to remove a sign, lock the door and walk away, the owners of a failing mall property are left holding a large, chunky, now non-income-producing asset. What’s an owner to do? There really are only two alternatives: adapt or die.

Interval funds taking private wealth by storm: The semi-liquid, semi-illiquid investment product attempts to deliver the best of both strategies — for a price

There are a few frustrating issues private wealth advisers have faced for a long time. They have wanted access to institutional-grade products in a professionally managed fund. They wanted minimum commitments modest enough for their clients to afford. Also required was liquidity opportunities that did not stretch to five to seven years at a time. Lastly, they’ve wanted clients who were not so skittish about going illiquid with a portion of their portfolio, at least long enough to reap the premium illiquid products offered.

Roundtable: What will 2018 bring? Here is what some investment executives are predicting for the new year

There has not been a new year in recent memory any more unpredictable or ominous than 2018. Consider that: • One of the longest economic recoveries in U.S. history has just been goosed by a massive and unpredictable federal tax-cut bill • The cost of assets of virtually every stripe is over- inflated • A possible trade war with China looms • Crypto-currencies are filtering their way into the global economy • Fear surrounds the ability of cyber terrorists to disrupt vital infrastructure and financial systems • The country is closer to nuclear war than any time since when the Kennedy administration was confronted by the Cuban missile crisis And, yet, the United States has demonstrated the power and resilience of its economy time and time again. Meanwhile, historic technological advances are creating the promise of enormous gains in productivity and wealth generation with the use of artificial intelligence, robotics and virtual reality. We asked more than a dozen financial and investment experts to share their own insights and premonitions about where 2018 will take the private wealth industry and the United States at large.

Hotel industry’s changing landscape: A new JLL report says global forces are reshaping the lodging business

The global hotel industry is being reshaped by geopolitical and economic forces, as well as structural shifts resulting from technological disruption, changing leisure patterns and new market players. These factors stand to influence the global geography of the hospitality industry, with new and dynamic markets gaining clout vis-à-vis the established destinations. This new and evolving landscape of hospitality requires innovative ways of assessing market opportunity and risk. Based on a detailed analysis of 106 cities worldwide covering scale, demand growth, construction, investment and performance, JLL identified five groupings of cities, each of which offers different opportunities and risks for hotel investors and operators.

Large-cap growth one decade later: Is there a place for small-value shares in investor portfolios?

The heady rise in this year’s stock market has been powered by the tech sector, which now accounts for nearly one-quarter of the entire S&P 500 Index by market capitalization. The four so-called FANG stocks (Facebook, Amazon, Netflix, Google/Alphabet) alone generated 2 percentage points of the S&P 500’s 14 percent gain this year through September. Indeed, large-capitalization growth stocks are on quite a roll. In the 10 years from Sept. 1, 2007, through Aug. 31, 2017, large-cap growth returned 9.9 percent annualized, compared to just 7.2 percent for small-cap value stocks, which historically have been the best-performing U.S. equity asset class. In other words, during the past decade, the “small-cap premium” has become a deficit of 2.7 percentage points. Is it time to throw in the towel on small caps?

Are you cattle, or the brand? The revisionist future at this magazine is based on the world’s most powerful brands, and three essentials for building one

One of the favorite questions I ask chief executives during profile interviews is, How is your firm different today from what you originally envisioned? That question is based on the inevitable revisions any business plan goes through, either based on miscalculations or evolutionary changes required to respond to the ever-changing industry environment.

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