URL:
Location:
Laguna Niguel, CA
Niche:
Multi-tenant industrial
Prior::
Real Crowd

Overall:

Communication/Reporting:

Track Record/Performance:

Sponsor Fees:

Avistone is a real estate investment management firm with expertise in the acquisition and operation of multi?tenant industrial properties nationwide. Founded in 2013, Avistone today owns and operates over 1.5 million square feet of industrial space in California, Georgia, Ohio, Texas, and Florida.

 The executive management team of Avistone has over 60 years of combined experience in acquisitions, structured finance and asset management. The firm has the unique ability to integrate extensive capital market knowledge with “boots-on-the ground” commercial real estate expertise to successfully acquire multi-tenant properties that offer investors attractive yields and strong internal rates of return with relatively low risk. This acquisition strategy, combined with our asset management expertise, serves to improve returns and enhances the risk profile associated with our portfolio of investment properties.

1. Acquisition fee (typical) – 2%

2. Asset management fee (What is based? (Equity, Total Assets, or Revenue) 0.5% of purchase price annually

3. Management fee (typical) – 4% paid by the tenants with NNN leases

4. Construction fee (typical) – 5%

5. Sponsors Loan fee (typical) – N/A

6. Disposition fee (typical) – 1%

7. Promote & waterfall (typical) 8% Preferred Return, then return of original capital, then spilt profits 70% to investors 30% to Avistone

8. Does Sponsor have catch up fees in waterfall? - No

9. Years of experience/existence – In business for our years, principals have over 60 years experience

10. Number of deals sponsor has participated with outside investors - 12

11. Asset Value of Sponsor's Investments - $86 million

12. Average Investor IRR on completed deals (Low, high and median. If available) – Haven’t sold anything yet

13. Number of times exercise their callable right to investors - none

14. Typical co-investment by sponsor (% or equity) – 5-10%

Avistone premiere business parks is an active sponsor with many deals that can be found by contacting investors@avistone.com. You can look over the ratings and reviews below. Discover if Avistone is a legitimate or scam sponsor.

Due Diligence & Discussions

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Zika Virus

May 10, 2017

I did not invest with Avistone.  This is only based on my DD.  The setup/structure of Avistone is not very investor centric.  Fees are high.  2% acquisition on a 60-70% LTC is roughly 4.5%-6.5% of investor contribution.  Dispo fee of 1% is around 2.3%-3.3% of investor contribution (many sponsors also don't charge a dispo fee if acquistion fee is charged).  I also don't like how they charge a loan fee or brokerage fee whether not an actual broker was used.  Avistone's expertise is not in the brokerage industry, and so if they don't use a broker, that savings ought to pass to investors.  Instead, there is a conflict of interest to collect a fee and not use industry experts (brokers), or to collect the difference between the fee and what the actual cost is.  Again, many sponsor simply do this at cost.  Furthermore, their legal documents suggests that they are entitled to fees regardless of profit/loss.  Some sponsors have language that fees will be reduced or even negated if there is no profit or if investors don't meet their preferred.  There are other fees, but I felt those were in line with their competitors.

I do believe they have performed on target since 2013.  However, 2013 to present is a short operating history and during a strong real estate market. Hence, most sponsors have also performed well during this period as well.  Hence I rated them average in this regard.  

Their communication was excellent.

At the present time, they are not changing their structure, which is understable as there is likely a lot of investor dollars floating around. 

How and what Avistone will do in a down market remains yet to be seen.  However, overall, feeling of the investment structure is not a win-win, but rather, "let me take my share first, and I'll give you enough to keep you interested".  Hence I decided not to invest.

Reply By: Sponsor

Sep 01, 2017

Thank you for taking the time to review one of our deals.  We appreciate feedback like you have provided and below I have responded to each of your points.  Avistone strives for transparency and offering great deals to its investors.  Thank you for taking the time to review our responses.

 

Regarding fee concerns:

Based on continued industry research, we feel our fees are consistent within the industry for industrial / commercial property offerings. Generally speaking, fees for multi-family and other properties with homogenous units may be lower due to the size of their markets and relative ease to underwrite.  Solid industrial / flex property investment opportunities are hard to find and capture as well.

 

Regarding the loan fee / brokerage fee to the sponsor concern:

Our PPMs state the sponsor will not receive a fee on the initial loan, which runs for the projected life of the investment.

 

Regarding fees being paid regardless of profit/loss:

The fees we charge are to source, underwrite, purchase, personally execute and guarantee the loan, operate and ultimately supervise the sale of the property.  We only make a profit (above the cost of employing professionals to perform the foregoing tasks) as a sponsor if investors make a profit. 

 

Regarding track record of sponsors:

It is true that we have a shorter track record as Avistone. The principals of Avistone, who have a long and successful track record, left very comfortable positions to found the company because they forecasted a bull market 4 years ago. A significant number of sponsors who have been in business for over 10 years suffered losses when the market crashed about 10 years ago. Avistone continues to watch the direction of the market and is very bullish on the industrial / flex space in the future.  With that, Avistone has put an even greater focus on the risk it takes with its deals, as in strong real estate markets like this one, we see sponsors willing to take greater risk because things are going so well. This is the exact time to mitigate risk even more from Avistone’s perspective. 

 

Regarding Avistone’s communication:

Thank you for the compliment.  We strive to be timely and transparent with our investors.

 

Regarding not changing our structure:

It is true that there is investment equity available, however there are less acquisition candidates available that meet the risk/return profiles investors are seeking. We try to minimize fees in our deals so that they cover our costs, but are not a profit center for us, as the higher the fees the lower the returns we can provide to investors in our deals. Ultimately, investors get what they pay for and it is our job to earn confidence and perform for our investors every day.  With over 150 investors to date, we take the responsibility of delivering for them very seriously.

 

Regarding how Avistone will do in a down market:

From Avistone’s perspective there are several keys to surviving a downturn:

1.       Invest in strong metro markets that have multiple economic drivers, growing employment numbers and high occupancy rates

2.       Purchase cash flowing projects

3.       Spread leasing risk among multiple tenants in multiple industries

4.       Purchase properties below replacement cost

All markets and investments have risk.  The key is to focus on cash flow, asset management and risk mitigation to endure the difficult markets.

 

Once again, thank you for taking the time to consider the investment.

 

David Sheets

VP of Investor Relations

Avistone

davids@avistone.com

 

D J

Jan 30, 2017

Have been in one investment with them for about 6 months, but looked at several they have offered.  If you are looking for a 'steady eddie' type of sponsor with reasonable fees this is the one.

D D

Jan 27, 2017

I've been in their industrial fund over a year, consistent, timely monthly distributions auto-deposited and almost unchanging monthly return that so far has met their initial expected CoC returns. Decent amount deal flow / opportunities. Hard to give firm recommendation as nothing has been exited yet but so far so good.

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Avistone, LLC Avistone, LLC
Rated 4.1/5 based on 5 customer reviews

Avistone is a real estate investment management firm with expertise in the acquisition and operation of multi?tenant industrial properties nationwide. Founded in 2013, Avistone today owns and operates over 1.5 million square feet of industrial space in California, Georgia, Ohio, Texas, and Florida.

 The executive management team of Avistone has over 60 years of combined experience in acquisitions, structured finance and asset management. The firm has the unique ability to integrate extensive capital market knowledge with “boots-on-the ground” commercial real estate expertise to successfully acquire multi-tenant properties that offer investors attractive yields and strong internal rates of return with relatively low risk. This acquisition strategy, combined with our asset management expertise, serves to improve returns and enhances the risk profile associated with our portfolio of investment properties.

1. Acquisition fee (typical) – 2%

2. Asset management fee (What is based? (Equity, Total Assets, or Revenue) 0.5% of purchase price annually

3. Management fee (typical) – 4% paid by the tenants with NNN leases

4. Construction fee (typical) – 5%

5. Sponsors Loan fee (typical) – N/A

6. Disposition fee (typical) – 1%

7. Promote & waterfall (typical) 8% Preferred Return, then return of original capital, then spilt profits 70% to investors 30% to Avistone

8. Does Sponsor have catch up fees in waterfall? - No

9. Years of experience/existence – In business for our years, principals have over 60 years experience

10. Number of deals sponsor has participated with outside investors - 12

11. Asset Value of Sponsor's Investments - $86 million

12. Average Investor IRR on completed deals (Low, high and median. If available) – Haven’t sold anything yet

13. Number of times exercise their callable right to investors - none

14. Typical co-investment by sponsor (% or equity) – 5-10%

Avistone premiere business parks is an active sponsor with many deals that can be found by contacting investors@avistone.com. You can look over the ratings and reviews below. Discover if Avistone is a legitimate or scam sponsor.