{"id":18438,"date":"2017-12-11T18:02:02","date_gmt":"2017-12-11T23:02:02","guid":{"rendered":"https:\/\/qa.bluevaultpartners.com\/?post_type=news&p=18438"},"modified":"2017-12-11T19:02:22","modified_gmt":"2017-12-12T00:02:22","slug":"jll-income-property-trust-celebrates-five-years-a-conversation-with-allan-swaringen","status":"publish","type":"post","link":"https:\/\/qa.bluevaultpartners.com\/jll-income-property-trust-celebrates-five-years-a-conversation-with-allan-swaringen\/","title":{"rendered":"JLL Income Property Trust Celebrates Five Years: A Conversation with Allan Swaringen"},"content":{"rendered":"

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JLL Income Property Trust Celebrates Five Years: A Conversation with Allan Swaringen<\/strong><\/h1>\n

December 11, 2017 | Beth Glavosek | Blue Vault<\/p>\n

\"Allan<\/p>\n

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After building an admirable track record providing pension funds and endowments with high quality, diversified core real estate, industry giant LaSalle Investment Management saw an opportunity to bring its 40 years of institutional experience to individual high-net-worth investors. JLL Income Property Trust was thus founded in 2012 as an advised real estate investment trust (REIT) managed by LaSalle Investment Management and sponsored by JLL.<\/p>\n

However, this wasn\u2019t just another non-listed REIT entering the market. \u201cWe weren\u2019t looking to create a new or \u2018better\u2019 nontraded REIT,\u201d says Allan Swaringen, President and CEO of JLL Income Property Trust. \u201cWe wanted to build something completely different that had never been done before.\u201d<\/p>\n

A pioneer in perpetual life REITs<\/strong><\/p>\n

JLL Income Property Trust was designed as a daily valued, perpetual life REIT, a concept of which company stakeholders and the advisor community were initially skeptical. \u201cWe are not like more traditional offerings that would open, sell shares, close, and liquidate or list at some point,\u201d Allan explains.<\/p>\n

Daily valuations \u2013 how are they possible?<\/strong><\/p>\n

JLL Income Property Trust publishes a daily net asset value (NAV) as a transparent means of communicating with stockholders. Calculating a daily NAV is a task that JLL Income Property Trust already had covered with their existing procedures. \u201cThis part was easy for us because we\u2019re used to our institutional clients requiring regular valuations at the end of each quarter,\u201d Allan says. \u201cSince we had historically performed quarterly portfolio valuations, it was simply a matter of evenly spreading the appraisals throughout the quarter for this product instead of valuing all of the properties at once.\u201d<\/p>\n

Allan notes that with 69 properties today and roughly 70 business days in a quarter, this schedule equates to one property appraisal per day on a rolling basis. The daily NAV\u00a0is then posted each day on the REIT\u2019s website<\/a>. It\u2019s evident that the REIT\u2019s valuation process is working. Allan says that all of the 23 properties JLL Income Property Trust has sold since its inception closed at a price within plus or minus 1% of its last valuation. \u201cThese sales affirm our process and that our properties have been brought to market at a fair price and that their valuation in our daily NAV was also fair,\u201d he says.<\/p>\n

It\u2019s worth noting that JLL Income Property Trust uses an independent, third-party Member of the Appraisal Institute (MAI) appraiser who maintains an \u2018arm\u2019s length\u2019 view of the REIT\u2019s assets.<\/p>\n

What about liquidity?<\/strong><\/p>\n

Allan says that it\u2019s important to not oversell the REIT\u2019s liquidity. It is still a long-term hold that investors should expect to leave alone for five to seven years. \u201cJLL Income Property Trust should never be considered as a trading vehicle,\u201d Allan says. \u201cInvestors shouldn\u2019t confuse daily valuations with daily liquidity.\u201d<\/p>\n

That said, liquidity options are broader than traditional non-listed REITs and are not limited to the proceeds from a Dividend Reinvestment Plan (DRP). After an initial one-year holding period, stockholders may request on a daily basis that the company repurchase all or a portion of their shares. There are also provisions in place for accommodating situations of death or disability.<\/p>\n

While stockholders are entitled to request share repurchases, these repurchases are limited each calendar quarter to 5% of the REIT\u2019s total NAV.\u00a0\u201cWe haven\u2019t hit this limit to-date, but there\u2019s always the possibility that we could,\u201d he says. Given our size this current limit is around $75 million.\u201d<\/p>\n

Regulatory foresight<\/strong><\/p>\n

Although launched before the introduction of FINRA 15-02<\/a> and the Department of Labor\u2019s efforts to implement a uniform fiduciary standard, JLL Income Property Trust\u2019s visionary concept was structured in such a way that it is not really impacted by these requirements.<\/p>\n

Other fast facts about JLL Income Property Trust <\/strong><\/p>\n