Why Your Financial Advisor Should Suggest Alternative Real Estate for Your Portfolio

Investors seek­ing alter­na­tive invest­ments (vs. stocks and bonds) may enter the are­na via §1031 exchange into a DST. Yes, for years we have han­dled tens of mil­lions of dol­lars in Delaware Statu­to­ry Trusts (DSTs) invest­ments (main­ly through §1031 tax deferred exchanges). How­ev­er, we also have exper­tise in sev­er­al oth­er alter­na­tive invest­ments.

June 7, 2025

By Al DiNi­co­la, AIF®
DST 1031 & Alts Spe­cial­ist
NAMCOA® — Naples Asset Man­age­ment Com­pa­ny®, LLC
Secu­ri­ties offered through MSC-BD, LLC Mem­ber of FINRA/SIPC

Keep­ing track and accu­rate records does demand a process. There is a chal­lenge in track­ing alter­na­tive invest­ment data espe­cial­ly when acquired from a vari­ety of spon­sors. We will fol­low up on track­ing data in a lat­er writ­ing.

Tra­di­tion­al stock and bond port­fo­lios may no longer pro­vide the diver­si­fi­ca­tion, income, or infla­tion pro­tec­tion many investors seek. Some experts and advi­sors may describe today’s invest­ment envi­ron­ment as dynam­ic.  Alter­na­tive real estate invest­ments are becom­ing a strate­gic addi­tion to a well-bal­anced port­fo­lio. Fixed income yields may remain uncer­tain in today’s volatile mar­kets. Some finan­cial advi­sors are well versed at sug­gest­ing a small por­tion of your port­fo­lio be ded­i­cat­ed to alter­na­tive real estate invest­ments. Finan­cial advi­sors should also under­stand the cur­rent invest­ment real estate that you hold and if there is a pos­si­bil­i­ty of repo­si­tion­ing the real estate you own. This may enable you as an investor to ful­ly take advan­tage of any tax advan­tages by sell­ing and acquir­ing a dif­fer­ent prop­er­ty.

There is Some­thing Beyond the Pub­lic Mar­kets.

Alter­na­tive real estate invest­ments may span a num­ber of options. Ten­ants in Com­mons are known as TICs, Delaware Statu­to­ry Trust known as DST’s, Oppor­tu­ni­ty Zones OZs, Oppor­tu­ni­ty Zone funds OZFs and LLC’s that are struc­tured for pri­vate real estate are only a few options. Investors may wish to be exposed to oth­er assets that do not move in the same direc­tion or cor­re­la­tion to the stock mar­ket. If the goal for the investor is to reduce over­all volatil­i­ty and poten­tial­ly enhanced long-term returns, then iden­ti­fy­ing the ben­e­fits of incor­po­rat­ing alter­na­tives into your port­fo­lio may be well spent time.

Access to Out of Reach Insti­tu­tion­al-Qual­i­ty Assets

When investors first dis­cov­er frac­tion­al own­er­ship struc­tures they may pause for a moment to under­stand what options are pro­vid­ed for them. There are sev­er­al frac­tion­al own­er­ship struc­tures that per­mit investors access to large scale com­mer­cial projects. These large-scale com­mer­cial projects may fall into indus­tri­al cat­e­gories, mul­ti­fam­i­ly, self-stor­age facil­i­ties and a host of oth­er real estate assets. The typ­i­cal investor may not be able to invest in these large insti­tu­tion­al qual­i­ty assets by them­selves. Sure­ly because of the expense involved. In addi­tion, can you imag­ine try­ing to qual­i­fy for a $50 mil­lion loan for an indus­tri­al prop­er­ty? Once the assets are sta­bi­lized and man­aged by expe­ri­enced spon­sors, investors will enjoy steady cash flow if that is the struc­ture put in place for the asset. Some assets are struc­tured as val­ue-add and poten­tial­ly have a large pay­off when the prop­er­ty is sold. The core con­cept for all of these would be cap­i­tal appre­ci­a­tion and income.

§1031 Exchange Oppor­tu­ni­ties With deferred tax­es.

We are known in the indus­try as hav­ing a high degree of exper­tise in han­dling §1031 exchanges. Espe­cial­ly if investors are uti­liz­ing Delaware Statu­to­ry Trusts (DST). When the §1031 exchange is paired with a DST, investors may enjoy sub­stan­tial tax ben­e­fits. Recent­ly Ten­ants and Com­mons have been restruc­tured to pro­vide advan­tages for cer­tain investors. Espe­cial­ly if they’re involved with the §1031 tax deferred exchange. Oppor­tu­ni­ty Zones are a dif­fer­ent type of poten­tial tax defer­ral invest­ment, but do not qual­i­fy for §1031 exchanges. By design Oppor­tu­ni­ty Zones have their own set of ben­e­fits that may be very attrac­tive to cer­tain investors. We han­dle these options and more for accred­it­ed investors. Look for updates to the cur­rent OZ qual­i­fi­ca­tion lat­er this year.

Pas­sive Income and Reduced Man­age­ment Headaches

With pro­fes­sion­al asset man­age­ment and struc­tured dis­tri­b­u­tions, investors can receive reg­u­lar income with­out the bur­den of day-to-day over­sight. For investors tired of the respon­si­bil­i­ties of being a landlord—dealing with ten­ants, repairs, and prop­er­ty management—alternative real estate offers a pas­sive solu­tion.

Infla­tion Hedge and Tan­gi­ble Asset Back­ing

Unlike stocks or bonds, which can be influ­enced by intan­gi­ble fac­tors, real estate is a phys­i­cal asset that serves essen­tial human and busi­ness needs—housing, health­care, stor­age, and com­merce. Real estate his­tor­i­cal­ly acts as an infla­tion hedge because prop­er­ty val­ues and rents tend to rise along with prices.

Cus­tomiza­tion and Strat­e­gy Align­ment

A sea­soned finan­cial advi­sor who under­stands these tools can align oppor­tu­ni­ties with your time hori­zon, risk tol­er­ance, and cash flow needs. Alter­na­tive real estate strate­gies can be cus­tomized based on your finan­cial goals—whether you pri­or­i­tize income, appre­ci­a­tion, tax defer­ral, or lega­cy plan­ning.

 A Dif­fer­ent Invest­ment Approach

If your advi­sor hasn’t dis­cussed how these invest­ments fit into your finan­cial pic­ture, it may be time to start the con­ver­sa­tion. Your finan­cial advi­sor should not only pro­tect your cap­i­tal but also posi­tion you for oppor­tu­ni­ty. Alter­na­tive real estate is no longer reserved for insti­tu­tions or ultra-high-net-worth indi­vid­u­als, it’s an acces­si­ble, strate­gic asset class for a wide range of investors.

If you would like addi­tion­al infor­ma­tion on the wide vari­ety of alter­na­tive real estate invest­ment options please con­tact us.

NAMCOA® is a SEC reg­is­tered invest­ment advi­so­ry firm that pro­vides com­pre­hen­sive port­fo­lio man­age­ment, finan­cial plan­ning, and fidu­cia­ry deci­sion-mak­ing ser­vices on behalf of retire­ment plan spon­sors. Our Dif­fer­ence is sum­ma­rized by our fidu­cia­ry approach which enables us to bet­ter meet port­fo­lio and retire­ment plan objec­tives, result­ing in stronger risk adjust­ed returns for investors and peace of mind for Clients. We also focus on alter­na­tive real estate invest­ment. Many real estate investors are seek­ing tax deferred solu­tions uti­liz­ing §1031 exchanges or Oppor­tu­ni­ty Zones.

DSTs are not for all investors.  The acqui­si­tion of a DST is for accred­it­ed investors only.  Con­tact your invest­ment advis­er for addi­tion­al details on how a DST may be a solu­tion to your 1031 Exchange and suit­ed for your invest­ment future. For more infor­ma­tion on how to prop­er­ly set up an IRC 1031Tax Deferred Exchange or if you are an accred­it­ed investor and would like addi­tion­al infor­ma­tion on a DST con­tact Al DiNi­co­la at 239–691-8098 or email adinicola@namcoa.com.

This is not an offer to pur­chase or solic­i­ta­tion to pur­chase any secu­ri­ty, as such be made only through an offer­ing mem­o­ran­dum or prospec­tus.  Invest­ing in secu­ri­ties, real estate, or any invest­ment, whether pub­lic or pri­vate, involves risk, includ­ing but not lim­it­ed to the poten­tial of los­ing some or all of your invest­ment dol­lars when you invest in secu­ri­ties. You should review any planned finan­cial trans­ac­tions that may have tax or legal impli­ca­tions with your per­son­al tax or legal advi­sor.   NAMCOA, LLC is a Reg­is­tered Invest­ment Advi­sor, reg­u­lat­ed by SEC (Secu­ri­ties and Exchange Com­mis­sion). Our cor­po­rate office is locat­ed at 999 Van­der­bilt Beach Road, Suite 200, Naples Flori­da 34108. Secu­ri­ties Offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC. 5 Cen­ter­pointe Dri­ve, Ste. 400 Lake Oswego, OR, 97035MSC-BD, LLC and NAMCOA are inde­pen­dent­ly owned and are not affil­i­at­ed.

Thank you.