Shopoff Properties Trust has closed escrow on its first $16.17 million of stock sales through an initial public offering and is now actively pursuing investment opportunities. Shopoff is seeking to raise as much as $200 million through its IPO. The first two million shares are offered at $9.50 a share, and the remaining 18.1 million shares at $10 per share.
The Irvine, Calif.-based real estate investment trust will invest in land and also seeks opportunities to invest in real estate-related debt. About 30% of the investments will be in commercial real estate-related opportunities.
“To our knowledge we’re the only publicly registered company to utilize a REIT for this land investment model,” according to William Shopoff, president and CEO of the company.
“There are many private funds and partnerships that invest in land, but we preferred the REIT structure for our shareholders due to its tax advantages, especially for IRA and other tax-exempt investors.”
The REIT is targeting returns of as much as 30% by acquiring undeveloped or undervalued real estate assets from homebuilders, developers and lenders. Shopoff’s investment strategy is to purchase assets at a discount and then add value to them by obtaining entitlements, zoning, and other regulatory approvals, with the plan of disposing of them when market tides become more favorable.
Most of the land opportunities the REIT is pursuing are located in the Western and Southwestern United States, including the states of California, Arizona, Nevada, Texas, and Hawaii. These are all states that saw substantial run-up in prices during the housing market boom and where the housing market is now in significant correction.