Through NOYACK’s partnership with BitPay, NOYACK Logistics Income (NLI) is the first REIT that supports cryptocurrency investment in real estate. A wide range of investors can now fund their commitment to NOYACK’s Logistics Income (NLI) REIT with cryptocurrency or a combination of crypto and traditional currency.
Combining innovation in commercial real estate investments with the opportunity to invest using crypto funds, NOYACK, led by founder and Managing Principal, CJ Follini, is at the forefront of real estate investment and REITs along with crypto, offering an excellent ROI from real-world logistics and commercial property.
NOYACK Logistics Income is a real estate investment trust (REIT) that invests in diversified supply chain real estate properties. The portfolio includes mobility hubs bringing together several forms of transit that support “last mile” delivery for eCommerce, including goods and services. NLI balances investment security with a target investment rate of return (IRR) of 18 to 20 percent.
NOYACK Logistics Income benefits from a strong investment thesis: eCommerce has grown over 140% between 2017 and 2022, but corresponding investments in the real estate infrastructure that support it have only grown by 25%. The supply-demand gap means that revenue from commercial real estate and logistics will only continue to grow over the next ten years.
NOYACK’s 38 years of successful investment in the sector have led to its creation of proprietary algorithms: PropertyQuotient™ and MarketQuotient™. The algorithms target investments in mobility hubs, along with warehouses, cold storage, and other commercial real estate opportunities. Particular areas of interest within NLI include fast-growing sectors like autonomous vehicle infrastructure, same-day delivery services, and climate-controlled storage.
According to Stephen Pair, BitPay CEO, “we see more investors asking to move cryptocurrency allocations into physical assets like real estate.” Pair estimates that moving the cryptocurrency economy into the real world represents at least $55 billion (USD) in purchases over the next year. Diversifying investment portfolios with cryptocurrency and real-world commercial real estate assets has been made easier and accessible with this pioneering initiative.
NOYACK’s BitPay integration enables investors to divide their investment between cryptocurrency and fiat currency. They can select their preferred wallet or coin exchange, scan a QR code, and complete their investment. The resulting flexibility enables investors to balance their portfolios between cryptocurrency exchanges and a real-world real estate investment trust. The BitPay integration allows retail investors to include real estate investment assets along with cryptocurrency in retirement accounts or other investment funds.
It has been several decades since inflation rates have risen to 6 to 7% or higher. NOYACK Logistics Income has been created to provide an investment rate of return significantly higher than potential inflation rates: 18% to 20%. Historically, REITs in general perform well during times of high inflation.
Commercial real estate investment trusts perform even stronger against inflation than residential or other types of REITs. Combined with CJ Follini’s 38 years of experience in commercial real estate investment, NLI is designed to successfully outperform inflation and deliver reliable cash flow. NOYACK Capital is also committed to providing investment education along with its revolutionary alternative investment platform, making institutional-grade private investments, including long-term opportunities, accessible to all investors.
NOYACK Capital is the fastest-growing alternative investment platform, with a goal of opening economic opportunities in the real estate market and delivering excellent investment performance to retail investors. Some real estate investment trusts (REITs) focus on institutional entities such as pension funds or endowments. NOYACK Logistics Income is open to accredited investors, family offices, institutional investors, registered investment advisors, and other qualified purchasers.
By partnering with BitPay, investors with digital assets can fund their commitment to NOYACK Logistics Income with cryptocurrency payments, including Bitcoin Cash (BCH), Ethereum (ETH), Dogecoin (DOGE), and more.
Through NOYACK Capital’s partnership with BitPay, you can invest in real estate using cryptocurrency in the first blockchain-accessible REIT, NOYACK Logistics Income. This partnership makes NLI one step closer towards tokenizing real estate.
It’s simple to complete your investor form and define your investor profile. Investigate next-generation investment opportunities including blockchain-based real estate and more with NOYACK Capital today.
The Rise of the Mobility Hub
Today nearly 55% of the world’s population lives in urban areas and the UN estimates that in the next 25 years this number will grow to nearly 70%. This growth will inevitably put new demands on urban infrastructure and logistics—so how are cities, innovative companies and investors responding?
Reduce, Reuse, Repurpose
Today nearly every type of traditional commercial and retail space is being repurposed and reinvented for new and innovative uses—a trend accelerated by the global pandemic. In fact, The CCIM Institute forecasts that adaptive reuse of retail centers and malls will be the most impactful trend for retail between now and 2025. Empty storefronts are being repurposed as ghost kitchens and micro-fulfillment centers, while larger, “dead” retail spaces are being turned into schools, event spaces and eCommerce distribution centers.
This major shift in how existing retail and commercial space is being used includes parking garages as well. Growing urban populations increasingly rely on public transportation. Urban planners are challenging decades-old zoning laws that set arbitrary parking minimums and experts predict that the American need for plentiful parking will decrease significantly in the coming years, with developers and planners shifting their focus to market-driven parking strategies for urban areas. The US currently has more than 2 billion parking spaces for only 250 million cars—that means a lot of very valuable real estate, especially in urban areas, is sitting empty. So, what will become of the urban parking garage as we know it?
Introducing The Mobility Hub / Reintroducing NOYACK Logistics is preparing for a paradigm shift in parking. Centrally located and with vast, underutilized square footage, structured parking garages are ripe for reinvention as Mobility Hubs. Mobility Hubs are part flexible parking garage, part fulfillment center, and part fleet management depot for ride-sharing services and last-mile delivery—developed and operated right where the customers are in the urban core rather than the urban periphery.
Mobility Hubs address a number of logistics issues unique to urban centers—from easing large truck and curbside delivery congestion to creating short-term, flexible ‘holding areas’ for rideshare and delivery vehicles. For businesses, they offer the potential for flexible expansion space, climate-controlled storage and last-mile fulfillment. They also enable faster delivery of goods and services for customers.
But What About Parking? So what happens when parking garages are used for things other than … parking? Will fewer spaces make it harder to park? The research predicts this will not be the case.
Independent think tank ReThinkX forecasts that by 2030 private car ownership will drop by 80% in the U.S., and the number of passenger vehicles on roads will decrease from 247 million in 2020 to 44 million. Furthermore, the eventual shift to autonomous vehicles will create a surplus of spaces by optimizing parking in under-utilized areas and decreasing the amount of time cars sit idle. as new networks for shared, electric and possibly autonomous vehicles grow, the demand for private cars and parking will continue to shrink.
It’s All About Value
Reinventing “dead” commercial space like parking garages into innovative Mobility Hubs can create value in many ways. Yes, they’re good for business, generating new income for commercial landlords and supporting the municipal tax base, but they also create intangible value above and beyond ROI. Repurposing existing structures reduces material waste and energy consumption and supports the growing need for electric vehicle charging hubs and ride-share programs.
Mobility Hubs also create value for businesses: flexible, affordable space for fulfillment and last-mile delivery to consumers.
Urban communities will also benefit from the value that Mobility Hubs offer. Benefits that go beyond faster delivery of goods and services and include reduced traffic congestion, noise and environmental pollution thanks to the Hub’s staging area for delivery trucks and rideshare vehicles.
For more information about how Noyack Logistics is investing in new Mobility Hubs, click here.
Economic times are changing and interest rates are rising. Investors can use several strategies to reduce inflation risk. Real estate investment trusts (REITs) are one way to provide steady cash flow as well as competitive long-term returns. Unlike bonds, interest rates and real estate prices are not inversely related. Real estate value goes up, hand in hand, with inflation and rising interest rates because RE managers have the ability to raise rents.
Within the REIT sector, there are some options that provide better assurance of a strong yield rate, especially logistics and warehouse REITs in the US that invest in industrial assets. Here are some of the reasons to consider investing in not just any REIT, but a U.S. Logistics REIT.
REITs are an effective hedge against inflation because rent is typically more predictable than other essential living expenses. Long-term leases generally have built-in protection from inflation, and short-term leases are normally based on the current market. Furthermore, REITs maintain a portfolio of leases, some of which they renegotiate each year, allowing them to change the price even on long-term leases. REIT portfolios also appreciate in addition to price increases on leases since REITs own the properties in their portfolios.
According to Nareit, REITs have historically delivered good market returns and had a good fundamental operating performance during times of moderate inflation. Nareit’s analysis of REIT performance as compared to the S&P 500 between the 1970s and now shows that REIT returns outperformed the stock market in 56% of 12-month periods with high inflation, and over 80% of the 12-month periods that had high inflation that was continuing to go up.
According to Nareit, “REIT returns have been resilient through many separate periods of moderate inflation.” During the most recent 12-month period analyzed, total REIT returns for U.S. investors were 45%, significantly higher than the Consumer Price Index (CPI) growth of 6.2%.
The way that leases work in any real estate sector contributes to the ability of REITs to offer reasonable protection during inflation. Long-term leases have inflationary protection built in. Short-term leases also respond to inflation and can increase with the consumer price index. When it comes to specialized REITs that invest in industrial logistics or other industrial REIT investment vehicles, leases are also long-term and have built-in inflationary protection.
Investors receive the benefits of real estate investment along with the advantages of investing in stock when they invest in a REIT. REITs provide annual dividend-based income and investment returns that are typically higher than the stock market.
Each year, REITs must distribute 90% of their taxable income in the form of dividends. At the same time, they also produce long-term appreciation in share prices. The long-term results in share price growth that REITs can and do achieve come from the way they earn money through long-term leases or interest payments on property financing. According to Nareit, REITs provide “investors with historically competitive long-term rates of return that complement the returns from stocks and bonds.”
When it comes to investment portfolios, volatility is a concern. No one wants to see wild shifts in investment earnings or dividends. While every investment could potentially experience volatility, the way REITs are structured and the types of properties they invest in help to provide more stability in terms of dividend income and long-term earnings. REITs that are linked to equity or mortgages, or hybrid REITs that combine both, are able to weather economic volatility and tend to provide more stable returns and growth.
Industrial and logistic REITs are able to offer steady cash flow for several reasons. They invest in an essential part of the economy that includes light manufacturing facilities that make food and essential products. They also can invest in cold storage facilities, warehouses, and product fulfillment centers.
Income from logistics properties comes from long-term leases, which can extend to 25 years. Industrial leases also usually have triple-net leasing structures. Tenants are not only long-term, they also pay for building insurance, maintenance, and real estate taxes. The result is reliable, steady cash flow to the REIT as well as to investors.
In general, REITs are easy to buy and sell, in contrast to investing directly in real properties. They also have risk-adjusted returns that are attractive with dividends that outperform other types of investments. As part of a balanced portfolio, REITs can offer protection against inflation without the drawbacks of buying and selling real estate directly.
NOYACK Logistics Income REIT is leveraging the investment gap in infrastructure that supports the massive e-Commerce sector which has grown by 140% over the past five years. While e-Commerce businesses have undergone rapid growth and are now considered mature, the underlying infrastructure — warehouses, cold storage, healthcare, life science, and mobility hubs — has only had a 25% increase in investment.
With a target distribution of 6% annual dividends and a rate of 18 to 20% return each year, NOYACK Logistics Income (NLI) is a great choice to diversify investment portfolios. Through NOYACK NLI, investors can receive excellent investment performance with affordable fees at the same time as they are supporting essential parts of the U.S. supply chain and the future of e-Commerce.
The Federal Reserve is projected to raise interest rates six more times in 2022, with more hikes set for 2023. With interest rates expected to reach 2.8% or more by mid-2023, investors who want yield should consider options other than the bond market. REITs are one option that can provide performance in a high-interest rate environment.
Looking back into the 20th century according to Kiplinger and Nareit, in the past 50 years, REITs have outperformed the S&P 500 with over four times the yield, but this covers all interest rate trends, not just the times when interest rates are going up.
When interest rates rise, Real Estate Investment Trusts (REITs) have also tended to continue to deliver strong returns. We’ll be covering the history and expert analysis on REIT investment performance in recent years.
Take a look at REIT performance compared to 10-year treasury yields. According to Investopedia’s overview of REIT performance since the 1970s, an in-depth S&P study confirmed that REITS strongly outperformed Treasury yields with two exceptions during the late 1980s and mid-1990s. During the late 1990s moving into 2001, REITS performed similarly to the stock market, but still provided a 27.4% better return than 10-year Treasury bonds.
In two periods during this time, mortgage REITs outperformed Treasury yields and the stock market. Between 1976 and 1981, 10-year Treasury yields started out returning 6.9%, growing to 15.3% returns. The stock market returned 46% during the five-year period. How did REITs do during that time? A whopping 137.4% return.
According to the Chicago Tribune, using data from Freddie Mac, in 1976, a 30-year fixed-rate mortgage averaged 8.7% interest, rising to 11.2% in 1979. By 1981, mortgage interest rates went up to 16.63%: an all-time high. The wild, disruptive economy of the late 70s/early 80s is the environment in past decades where REITs showed some of their strongest performance and returns to investors.
REITs outperformed Treasury yields and the stock market between 2003 and 2006 as well, according to S&P’s analysis. Treasuries offered 3.3% return in June 2003, and three years later, they were offering a 5.1% return. The stock market performed well during this period, with more than a 37% return. So, how did REITs do? They performed 108% better than 10-year Treasury notes and 70% better than the stock market.
Mortgage interest rates back when the top TV show was the original CSI were similar to those we’ve seen recently. In 2003, the average 30-year mortgage interest rate was 5.83%, and in 2006, it was 5.87%.
REITs outperformed 10-year Treasury notes during four of the prior six interest rate growth cycles and outpaced the stock market during three of these periods. As you can see from our analysis, blanket statements like “When interest rates rise, REITs underperform” don’t represent the complete picture or even the majority of the picture.
Real estate management teams can achieve investment returns that outpace inflation through strategic selection of properties, excellent management, and well-structured lease and finance terms. Establishing long-term relationships with commercial developers contributes to long-term value for properties. Experience and the ability to interpret demographic and economic data also help to boost profitability that can outpace inflation.
The studies we’ve covered encompass all REITs, including residential real estate, mortgage-backed securities, and commercial real estate. You can find REITs that invest in clean energy infrastructure and REITs that combine direct property ownership, mortgages, and real estate securities.
We’ve been discussing the historical performance and comparisons of general REITs and the stock market and Treasury notes during times of rising interest rates.
NOYACK’s Logistics Income is a specialized fund that combines the expertise of NOYACK and its 38-year successful track record. It is designed to leverage the opportunities in a specific type of real estate: commercial logistics. The fund is intended to deliver stable passive income along with long-term appreciation. It is investing in a crucial sector of the economy: logistics that support the massive, still growing eCommerce industry. Whereas top-sector eCommerce investments are mature and may not continue to grow at previous rates, customers aren’t going to stop ordering products or requesting services online.
Since 2017, eCommerce has grown by 140% to reach $2.4 trillion. But the physical infrastructure that makes all of this eCommerce possible has only grown by 25%.
The NOYACK Logistics Income REIT is a $125 MM fund designed by investors for investors with a target IRR of 16 to 18%, and a target annual distribution of 6%. It is focused on warehouses, cold storage, healthcare, life sciences, and mobility hubs.
NOYACK’s NLI can outpace inflation because it is investing in logistics properties in essential sectors supporting the eCommerce industry. NLI benefits from NOYACK’s 38 years of successful experience investing in commercial real estate, with an average historical IRR of over 20%. NOYACK’s family office networks and developer relationships enable it to maximize value from investments. This experience has enabled NOYACK to create proprietary investment algorithms PropertyQuotient™ and MarketQuotient™, which score and rank assets.
Contact NOYACK today to learn more about NLI, and invest in a commercial real estate portfolio built for wealth preservation and high-yield growth.
Following Russia’s invasion of Ukraine, over $56 million in cryptocurrencies has been sent to the beleaguered country in the form of donations. The surge in donations is due to the fact that cryptocurrencies can be sent anonymously and quickly, without the need for a bank or other financial institution.
This is just one example of how the financial system is changing in the face of war. With the accessibility of crypto, people are able to send and receive money without the need for traditional banking channels. This is particularly beneficial in war-torn countries, where banking infrastructure is often destroyed or disrupted.
Cryptocurrencies also offer a degree of security that is not present in traditional banking. When sending money via a bank, there is always the risk that the funds will be frozen or seized by a government. With crypto, there is no such risk, as the funds are stored on a decentralized network.
The decentralization of crypto, however, is a double-edged sword, with the New York Times reporting that cryptocurrency could be exploited by Russia to avoid sanctions. Even prior to Russia’s invasion, the US government had concerns that cryptocurrencies could dull the impact of sanctions, with nations like Iran using Bitcoin mining to bypass trade embargoes.
Russia is also developing a digital ruble, potentially enabling the nation to avoid sanctions by simply decoupling its currency from the US dollar.
Not only that, but crypto has been used to fund pro-Russian separatist groups in Ukraine. The groups can use Bitcoin and other cryptocurrencies to buy weapons and supplies, as well as to pay fighters.
Moreover, Russia has ties to crypto-related cybercrimes, such as ransomware that demands crypto payment, with many ransomware payments going to Russian wallets. These cybercriminals often have ties to the Russian government, making it difficult to trace and punish them.
While crypto offers many benefits, it is clear that it can also be used to fund illegal activity and skirt international sanctions. As the world becomes increasingly digitized, it is important to be aware of the potential risks and rewards of crypto.
In short, this is “the world’s first crypto war,” as described in a Washington Post article. As more countries become involved in the conflict, we are likely to see even more use of cryptocurrencies as a way to circumvent financial restrictions.
The war in Ukraine has already begun to have an impact on the world of cryptocurrency, with BTC-Hryvnia trade seeing a 6% premium due to the instability in the country.
This is just one example of how cryptocurrencies can be used to hedge against geopolitical risk. As fiat currencies come under pressure from international conflict, investors are turning to Bitcoin and other cryptocurrencies as a safe haven.
Both the Russian and Ukrainian currencies have been hit hard by the conflict, with the Russian ruble falling to a record low against the US dollar. The Ukrainian hryvnia, meanwhile, has seen more than a 7-year low.
This has led to increased demand for BTC-Hryvnia trades, as investors seek to protect their assets from fiat currency volatility. That said, crypto is, of course, still notoriously volatile, so moving into assets like real estate would be a more stable way to protect wealth in the long term.
Noyack Logistics’ Income REIT recent move to allow crypto funds to be used to purchase real estate is a great step in this direction.
The current global financial system is based on fiat currency, which is subject to volatility and manipulation. This has led to a search for alternatives, with many people turning to cryptocurrencies as a way to stabilize their wealth.
When comparing cryptocurrency returns to a standard market index, it’s clear that the historical performance of the likes of Bitcoin has been nothing short of exceptional.
Beyond wild price gains, we’ve also seen the greater acceptance of cryptocurrencies as payment methods and storehouses of value. Many institutional investors have started to invest in cryptocurrencies, which has helped to legitimize the asset class. More recently, it’s even been used as a safe harbor asset amidst the Ukraine crisis.
However, some crypto investors end up overexposed and under diversified. This often leads to large losses when the market corrects.
A good way to mitigate this risk is to invest that crypto in another area, such as real estate, which benefits from inflation and behavioral biases.
This is because, as the cost of living increases, the price of real estate generally rises as well. This means that investors who own real estate are able to maintain their purchasing power, even as the cost of goods and services goes up. Further, people tend to have a strong emotional attachment to their homes. This behavioral bias can lead to higher prices and increased demand for real estate.
Investing in real estate with cryptocurrency can help you to take advantage of these trends while diversifying your portfolio.
One company that is leading the way in this regard is Noyack Logistics Income, which has become the first REIT to accept cryptocurrency. The company has partnered with BitPay to allow investors to use Bitcoin and other cryptocurrencies to buy shares.
This is a significant development, as it shows that institutional investors are beginning to see the value of crypto. With more and more companies accepting cryptocurrency, we are likely to see even more investment in the space.
And as confidence in the traditional financial system continues to decline, we are likely to see even more people turning to Bitcoin and other cryptocurrencies as a way to protect their wealth.
Noyack Logistics Income REIT’s fundamental conviction is that logistics assets are undervalued relative to the market maturity of e-commerce. There is an enormous supply/demand imbalance that will drive increasing revenue in these assets classes for the next decade.
We strategically invest in supply chain infrastructure underpinning the accelerating digitization of the American economy. NOYACK provides investors with access to low-beta, high-yield diversified industrial commercial real estate that are historically difficult to access at scale. Investing in supply chain real estate is ideal to meet investor needs providing a tested hedge against inflation, stable yield and a share construction ideally suited to tax advantaged retirement vehicles such as Roth and 41K IRA’s while providing optimal wealth preservation.
NOYACK Logistics Income (NLI) is the First REIT to Accept Cryptocurrency for share purchases via Partnership with BitPay shaping the future of the real estate investment market.
The cold storage sector of real estate was already booming before 2020, but technological advancements and changes to online buying behavior, hastened by COVID-19, have caused the industry to see a massive increase in demand.
The NOYACK Logistics Income (NLI) real estate investment trust (REIT) offers accredited investors the opportunity to obtain stable returns and protection from inflation by investing in cold storage.
The current growth in e-commerce is a driving factor in the industrial real estate market. Builders are constructing warehouses, including those needed to maintain the supply chain of products requiring cold storage but demand is outstripping supply in key areas. More and more, it’s important for storage to be close to consumers. People are buying more goods that need cold storage and they don’t want to wait. Proximity is becoming more critical
These buildings are crucial for food and pharmaceuticals, which have federally regulated requirements for storage.
Compounding the demand-supply imbalance, existing cold storage buildings are becoming antiquated. CBRE reports that the average age of these facilities is 34 years. The need to upgrade these facilities quickly favors the speculative construction of cold buildings.
The global market in cold-storage construction was worth $7 billion in 2019, which Emergen Research predicts will rise to $18.6 billion by 2027. A 2020 study by CBRE shows the demand for cold storage in the U.S. will grow by 100 million square feet by 2025, although only five million square feet are currently under construction. Cold storage thus has enormous potential for investors.
The factors driving this growth include the increase in online grocery sales and subscription meal services, especially for fresh and perishable food. Only five percent of groceries were purchased online in 2019, according to Bain & Co. However, this figure doubled to 10 percent in 2020. The management consulting firm also predicts this figure could increase by 12 percent by 2025. [Same – move up?]
The rising use of pharmaceutical products requiring specialized storage is also a major contributor towards the growth of cold storage. Moderna’s vaccine for COVID-19 must be stored at -20 degrees Celsius, and Pfizer’s injection requires storage at -70 Celsius. However, most hospitals only have refrigeration capability in the range of -2 to -8 degrees Celsius, which causes the vaccine to spoil after five days. This limitation creates real challenges for the distribution and storage of drugs that must be stored at very low temperatures.
Investors have already noticed the difference between the demand and available supply for cold storage in the U.S since the pandemic.
The capital currently invested in cold buildings comes primarily from private investors, who accounted for about 80 percent of the buyer pool in 2021. However, REITs and other institutions may begin investing in cold storage more heavily as the capitalization rates on these investments continue to shrink.
Capital markets are more focused on cold storage than ever before, although investors are mostly interested in buildings in core markets with long-term tenants. Relatively few cold storage buildings meet these criteria, but they still provide a significantly higher yield over dry warehouses with similar tenant credit profiles and lease terms.
NOYACK believes that these assets are undervalued in comparison to e-commerce’s market maturity. This market has grown by 140 percent over the last five years, reaching a current value of $2.4 trillion. However, the real estate infrastructure available to meet this demand has only increased by 25 percent. This difference between supply and demand will drive revenue from these assets for the next decade, and likely beyond.
NLI is the first investment offering from NOYACK Capital, a rapidly-growing alternative investment platform. It’s designed for yield-driven investors looking for optimal wealth preservation and has a diversified portfolio of commercial real estate properties in North America’s supply chain and logistics infrastructure. NLI’s target assets include cold storage, dry warehouses, healthcare buildings, and mobility hubs.
NOYACK sources assets through an umbrella partnership real estate investment trust (UPREIT), allowing real estate owners to contribute their property to a REIT. We use custom algorithms like MarketQuotient™ and PropertyQuotient™ to score and rank assets. We also expand our portfolio by making commitments to large developers in exchange for discounted pricing. In addition, NOYACK repurposes assets in response to changes in supply chain trends, improving revenue and yield.
Distributions from NLI are protected from depreciation, resulting in a cash flow that’s nearly tax-free. Furthermore, our buy-and-hold strategy allows investors to defer their property gains. Our portfolio of logistics assets is also exceptionally stable without sacrificing upside.
If you are invested in the stock market, we don’t have to be the ones to tell you what happens to your portfolio when the CPI is rising at 7%+. With rising rates and low consumer confidence, the stock market doesn’t look to be improving. So where should you turn to hedge inflation and protect your principal? Whether the Fed’s rate moves can slow inflation effectively or not, real assets and rents tend to “inflate with inflation.” As a result, real estate investment trusts (REITs) are an asset class that can offer protection against inflation.
How much protection could a REIT offer to investors in times of high inflation? Potentially, a lot.
During times of high inflation — whether or not there’s high or low economic growth — REITs have outperformed other major investment classes, including government bonds, stocks, and investment-grade bonds.
To find out just how REITs performed compared to other investment choices, we looked at some of our past peak inflation periods. What did we find out?
For the 20 year period ending in December 2020, as you can see from the below chart, REITs outperformed a range of other asset classes when inflation peaked – whether economic growth was considered low or high.
The rate of return on your investments is an important consideration, but so are tax implications.
Real estate investment trusts offer tax advantages that start with their requirements to be a REIT. A REIT must distribute at least 90 percent of its taxable income to its shareholders, but 100% of these distributions are not taxable at the same rate as ordinary rental property income, i.e. if you chose to invest in real estate directly.
A privately-held commercial REIT like NOYACK’s NLI (NOYACK Logistics Income REIT) directly invests in commercial real estate and may provide tax benefits. Of course, your financial situation is unique and in evaluating any tax implications of investing in a commercial REIT, you should consult with your financial advisor.
Private REITs can produce higher returns whether or not it’s a time of high inflation
In 2022, inflation is continuing to rise. That’s an important consideration, but commercial REITS can perform better than other investment vehicles whether inflation rates are high or low. Part of the reason for their strong performance is the nature of commercial real estate. Commercial leases are generally long-term that allow for annual increases.
Click here if you want to learn more more about the current state of inflation.
NOYACK Logistics Income REIT (NLI) is producing higher returns than publicly-traded REITs for a variety of reasons, starting with NOYACK’s 38+ year track record of success. Years of successful experience have enabled the NLI REIT to focus on five different commercial real estate/logistics categories:
The NLI strategy is tied to the fact that digital or e-commerce has grown by 140% over the past five years to reach a massive $2.4 trillion. At the same time, the commercial real estate infrastructure that makes this rapid e-commerce market growth possible has increased by only 25%. This imbalance in supply vs. demand provides considerable opportunity for savvy investors.
NOYACK’s “competitive edge” has many factors, but it has resulted in a “best-in-class” historical track record, with an impressive average historical IRR of better than 20 percent and an average equity multiple of 5.3%.
As customers continue to move toward e-commerce, demographics change, and supply chain and logistics work to keep up, investments in the sector make sense from several perspectives, in addition to commercial real estate’s ability to provide some protection against inflation.
NOYACK has some specific themes for the NLI, which include acquiring and modernizing assets that can benefit from industry trends in micro-fulfillment, life sciences, and mobility. If you haven’t heard of micro-fulfillment, it’s an essential part of the growing e-commerce ecosystem. It combines the speed and convenience of online ordering for local store pick-ups with large automated warehouse efficiency. It includes warehouse technology like robots and data-driven operations and “last-mile” fulfillment.
It takes experience, vision, a deep understanding of how e-commerce has impacted logistics and will continue to impact the sector. NOYACK’s track record shows why and how NLI can outperform publicly-traded REITs.
The world’s assets are worth over $1,540 trillion, while global equities are worth just around one-twelfth of that, or $120 trillion. This imbalance exists because the overwhelming majority of assets are not securitized, meaning they lack the tradability, fungibility and liquidity of a financial instrument.
Cryptocurrency is starting to play a role in filling this gap. Bitcoin, the first and best-known cryptocurrency, was created in 2009 as a way to reinvent the legacy financial system for a new era. Cryptocurrency is a digital asset that acts as a unit of account, store of value and medium of exchange, much like fiat currency.. But cryptocurrency can also be used to securitize assets, similar to stocks and bonds, through tokenization
In an early example, Overstock.com issued $5 million in CryptoBonds. This was just the beginning; as cryptocurrencies became more popular, more and more assets were securitized in this way. Recently, NOYACK Logistics Income (NLI), a REIT investing in supply chain real estate, NOYACK Capital, is now accepting cryptocurrency payments for shares via a partnership with BitPay. This partnership makes NLI the first ever REIT to accept cryptocurrency, enabling investors to fund their commitment with Bitcoin (BTC), Ethereum (ETH), and five USD-pegged stablecoins.
Understanding security tokens
While much of the hype and speculation in the blockchain world revolves around utility tokens and their potential use cases, security tokens are quietly gaining traction and may represent a more significant long-term opportunity. Security tokens are digital representations of traditional securities such as stocks, bonds, and real estate.
Unlike utility tokens, which are not backed by any underlying assets, security tokens are backed by real-world assets. These benefits have already fueled a billion-dollar security token market cap and many believe that the market will only continue to grow. In fact, while currently in its nascent stages, the strategic market analysis firm Quinlan and Associates predicts that security token issuance will be worth more than $4 trillion by 2030.
One example of a company taking advantage of this burgeoning market is NOYACK. Through their BitPay partnership, investors can convert digital cryptocurrency into ownership of a hard asset.
One of the benefits of cryptocurrency-backed securities is that they are easier to trade than traditional assets. This is because they are digital and peer-to-peer, and thus can be transferred instantly between parties, without centralized intermediaries. This could help to reduce the liquidity premium that currently exists in many markets.
Cryptocurrencies may also help to improve the efficiency of the securities market. One of the problems with the securities market is that it is often difficult to find buyers and sellers for specific assets. This is because there is a lack of standardization in the market. Cryptocurrencies could help to solve this problem by serving as a global standard for securities.
How security tokens are managed
The securities trade life cycle is no simple task. As a result, a wide range of players are involved in its management, including:
Each of these players has a specific role to play in the management of securities. For example, transfer agents are responsible for the safe and efficient transfer of securities between investors. Registrars maintain a record of all security holders and their corresponding shareholdings. And custodians are responsible for safeguarding the assets.
The usage of security tokens does not necessarily disintermediate these players entirely, but rather improves visibility, efficiency, and auditability of the process. With that said, new toolsets and protocols are needed to manage security tokens and the various stakeholders involved. Instead of trading on the NASDAQ or NYSE, security tokens trade on a new era of crypto exchanges like Securitize, INX, and tZERO.
We’re only just seeing the beginning of the security token Renaissance. As the market matures, we can expect to see a wide range of security tokens being issued that represent everything from traditional securities to diamonds, sportcars, art, yachts, and more. While NOYACK, for instance, began life offering real estate investments, we expect to see more types of assets being issued in the future as the market matures.
While regulators haven’t yet fully embraced the idea, and investors are slow on the uptake, as reported by CoinDesk, the market is nonetheless heating up, and growing awareness could see security tokens take off dramatically in the coming years.
A Growing Alternative Asset Class
Cryptocurrencies have been around for less than a decade, but they have quickly become one of the most popular alternative asset classes. At the end of 2018, the total market cap for all cryptocurrencies was just over $100 billion. However, by the end of 2021, that number had surged to over $3 trillion.
That said, it’s still a small group compared to other major asset classes. For one, the global real estate market is worth an estimated $10.5 trillion. If you’re interested in alternative investments, whether to diversify your portfolio, increase returns, or hedge against volatility, alternatives should be on your radar.
NOYACK Capital makes it easy for you to invest in top-tier alternative investments. We combine best-in-class investment management expertise with superior deals sourced from private family office networks available, all while accepting cryptocurrency as investment equity. As savvy investors know, alternative investments offer unique opportunities to generate outsized returns and hedge against volatility in traditional markets. All investors can now gain exposure to these opportunities.
Supply chain backlogs and rising costs of materials and labor have created challenges for the companies that occupy industrial real estate, but these issues may actually benefit their landlords.
Industrial tenants are increasing their demand for space to stockpile goods to mitigate the supply chain issues, and adding more facilities can also help decrease their overall logistics costs by cutting down on transportation expenses, top industrial executives said Tuesday at the National Association of Real Estate Editors Conference in Miami.
These dynamics could create even more tailwinds for an industrial market that has already been one of the hottest real estate sectors over the last year as e-commerce providers have ramped up their delivery networks during the coronavirus pandemic. The U.S. industrial market experienced 291.9M SF of net absorption through the first nine months of this year, according to CBRE, 135% more than the same period last year.
Duke Realty Corp. Regional Senior Vice President Stephanie Rodriguez, who leads the Florida region for the industrial REIT with a 160M SF U.S. portfolio, said tenants doing deals today are requiring more space to stockpile goods.
“Our tenants are looking for more space because they don’t want just-in-time inventory, they need to stockpile inventory because they’re finding that containers aren’t being offloaded in ports right now, they’re just lingering outside of ports, and then when they get to ports they don’t have truck drivers to bring them to warehouses,” Rodriguez said.
“There are a lot of different factors impacting our customers, and we’re seeing a real uptick impact in demand for current customers looking for space in the market right now,” she added.
Rodriguez said in Florida, where the REIT owns more than 13M SF of industrial space, tenants are typically requiring around 15% to 20% more space to stockpile goods.
“A tenant who may want to renew their lease, they might be coming to us and saying ‘we want to renew, but we really need 30K SF more space,'” she said.
CBRE Executive Managing Director John Morris, who leads the firm’s Americas Industrial & Logistics business, said this growth from industrial tenants needing to stockpile goods has helped drive CBRE’s leasing activity up 64% this year.
Additionally, Morris said the inflationary pressures in the industry, including rising labor and transportation costs, are pushing industrial tenants to lease more space in order to save money.
Warehouse rent only comprises around 5% of the total logistics costs for industrial occupiers, Morris said, while transportation costs account for between 50% and 70%. And while he said industrial rents are rising about 10%, the transportation costs are going up much faster. He said freight costs are increasing by around 50% and container prices are up by as much as 150%, making them the more pressing expenses that companies need to address.
In order to bring down these transportation costs, many industrial tenants are looking to increase their real estate footprint to be closer to customers and reduce the distances that trucks need to drive, he said.
“The factors that are going up more significantly are the ones those tenants have to fix, and the way you fix them is by adding facilities and space to your network,” Morris said. “It sounds crazy to say this, but inflation in the supply chain is actually not a bad thing for industrial real estate.”
Morris, speaking to Bisnow after the NAREE panel, said he expects transportation costs to continue rising next year, especially because the shortage of truck drivers will push wages up, and this will further increase the demand for industrial real estate.
“If you’re a tenant trying to lower your average cost to ship to your house, to a warehouse, to a store or whatever, you need more space when your transportation costs rise,” Morris said. “As you add space, transportation costs go down, but facility costs go up. So that will fundamentally continue.”
Rodriguez told Bisnow she thinks industrial users will continue the practice of stockpiling goods even after the supply chain issues are eventually resolved, meaning that they won’t pull back from the excess space they have leased this year.
“The pandemic really gave people the opportunity to look hard at how they’re operating their businesses. [They’re saying] ‘do we shift our model and keep a little more inventory on-site?'” she said. “Real estate is such a small piece of the pie for these operators. It’s not that big a deal to increase your footprint incrementally to accommodate for that safety stock as opposed to the just-in-time inventory.”
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NOYACK Logistics Income REIT operates a website at noyacklogistics.com.
By using the Platform, you accept our Terms of Service and Privacy Policy.
Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in partial or total loss.
While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of data provided by investors or other third parties.
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THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. YOU SHOULD READ THE OFFERING CIRCULAR
Full Disclaimer: The material contained herein does not constitute an offer to sell or a solicitation of any offer to purchase shares of stock in NOYACK Logistics Income REIT, Inc. (“NLI”), nor shall there be any sale of such interests in any state or other jurisdiction in which such offer or solicitation would be unlawful. Offers for the sale of any such shares will only be made to investors, who meet certain suitability standards, pursuant to the NOYACK Logistics Income REIT, Inc. Confidential Private Placement Memorandum (the “Memorandum*), which will be distributed by NLI at such time, if any, as it commences the offering of its shares of stock. Investments in NLI’s shares are not suitable for all investors. Investments involve a high degree of risk and should only be considered by investors who can withstand the loss of their entire investment. Prior to purchasing any such interests, prospective investors should carefully review the Memorandum, including the “Risk Factors” section, and any supplement thereto. Investors should perform their own investigations before considering an investment in such interests and consult their own legal and tax advisors. The information contained herein is qualified in its entirety by reference to the Memorandum. The past performance of NLI’s affiliates described herein is not indicative, nor a guaranty, of NLI’s future results and no assurance can be given that any of NLI’s investments will be liguidated on similar terms as those described herein or at a profit, or the amount of profit, if any. Accordingly, there is no guarantee that NLI’s performance will be similar to the prior performance of affiliates of NLI. The information contained herein is strictly confidential and only intended for the recipient and may not be redistributed without the prior consent of NLI. You may not disseminate, disclose or engage in any business activity based upon or otherwise use the information herein for any purpose other than an evaluation of a potential transaction described herein. You should conduct your own independent analysis of the information contained or referred to herein. Nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past, present or future. You acknowledge and agree that NLI and its representatives are under no obligation to accept any offer or proposal by any person or entity regarding a potential transaction. While NLI expects to seek a liquidity transaction, there can be no assurance that an acceptable transaction will be available or that the market conditions for a transaction will be favorable during that time period. As a result, investors may be required to hold their Shares beyond the projected liquidity date. Private securities offerings are not registered with the SEC and are considered highly speculative. An investment in private securities is speculative, involves a high degree of risk and may result in the loss of your entire capital contribution.