As 2024 comes to a close, I would like to take this opportunity to provide my yearly overview of our business, and views on the economic climate within which we operate. We expected 2024 to continue to present challenges and it has certainly done so, but are happy to report some positive opportunities have come along with it. One of the most significant being that the rate decreases by the Federal Reserve have finally begun – albeit several quarters later than forecasted (or hoped for).
Transaction volume begun a recovery from the low levels of 2023, but still remains rather anemic compared to a few years ago. Our firm both sold and acquired less than our forecasted activity, but the assets we did acquire are already shaping up nicely – of course, performance will depend on market conditions moving forward. Additionally, we have a pipeline of acquisitions and development starts for 2025 that provide a level of optimism we haven’t felt in quite some time.
We also financed numerous projects during the year and have managed to navigate the choppy waters with success. We owe this to the dedication of our team and the level of skill and professionalism they exhibit.
Additionally, we have managed as a nation to get through another election year and with an arguably lower level of drama than the last few cycles. Our economy is currently standing on solid footing, and we remain hopeful the Fed will achieve the soft landing it has aimed for throughout 2024. At Shopoff, we will be monitoring how various policy changes will impact the economy and in turn, the investments we hold, and are focused on how tariffs and labor markets will impact inflation.
I have been disheartened to see that there has been little progress on the wars in Ukraine and the Middle East. Although, the recent ceasefire between Israel and Hezbollah may be the beginning of a larger conversation towards peace, we remain optimistic that a peaceful solution will be forthcoming. Despite this worldwide turbulence, the stock markets are experiencing upward momentum.
In 2025, our team still anticipates seeing opportunities from upcoming debt maturities, as well as projects without capital infusions that will have challenges when refinancing. We continue to monitor and analyze these opportunities daily.
In terms of product type for the coming year, we continue to see a lot of opportunity in both for-sale and rental housing, and are especially encouraged by new home sales across the country. We also continue to see opportunities within the logistics market, particularly in the Inland Empire area of Southern California. And while we remain bearish on most office buildings, utilizing our team’s unique skill set, we are finding a few interesting opportunities in this space. These are mostly found in acquiring office for alternative uses, or because price and terms are so compelling they provide an interesting investment thesis. With that in mind, we believe there will be more opportunities in the office arena moving into 2025.
The firm plans to start several new development projects in the coming year, including logistics, luxury condominiums, workforce housing, and apartments, to name a few.
I’m grateful for the opportunity to lead this firm and am proud of our collective efforts, even when they may fall short of our lofty expectations. We have set a solid foundation for our investors and our future, and I look forward to leading this firm for years to come.
This recording is intended for informational purposes only. The views, thoughts and opinions expressed in this outlook belong solely to the author. This outlook is based on current public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and forecasts contained herein are as of the date hereof and are subject to change without prior notification. Statements about the strength of the stock market, company projects, or future opportunities should not be interpreted as guarantees of success or returns. All business and market activities carry inherent risks.
Forward looking statements.
This recording contains forward-looking statements regarding our company’s business plans, goals, and anticipated performance. These statements are based on current expectations and assumptions, some of which may vary, potentially materially, from actual events. They do not constitute a prediction or guarantee of actual performance. Factors such as market conditions, regulatory changes, and economic trends may impact the company’s results. Risks and uncertainties that may affect performance are further discussed in the relevant Private Placement Memorandum and any supplementary documents. Actual performance may differ materially from the statements made herein.
Prior performance is not indicative of future results. There is no assurance that future projects will achieve comparable results. Alternative investment performance can be volatile and value- added real estate investments may involve additional risks. An investor could lose all or a substantial amount of their investment. There is no assurance that the Partnership objectives will be achieved. Information contained herein is not intended as tax or legal advice and Investors are encouraged to discuss investment decisions with their legal, tax and financial advisors.
About Shopoff Realty Investments
Shopoff Realty Investments is an Irvine, California-based real estate firm with a 31-year history of value-add and opportunistic investing across the United States. The company primarily focuses on proactively generating appreciation through the repositioning of commercial income-producing properties and the entitlement of land assets. The 30-year history includes operating as Asset Recovery Fund, Eastbridge Partners and Shopoff Realty Investments (formerly known as The Shopoff Group). Performance has varied in this time frame, with certain offerings generating losses. For additional information, please visit www.shopoff.com or call (844) 4-SHOPOFF.
Disclosures
This is not an offering to buy or sell any securities. Such offer may only be made through the offering’s memorandum to qualified purchasers. Any investment in Shopoff Realty Investments programs involves substantial risks and is suitable only for investors who have no need for liquidity and who can bear the loss of their entire investment. There is no assurance that any strategy will succeed to meet its investment objectives. The performance of former assets are not indicative of future results of other assets. Securities offered through Shopoff Securities, Inc. member FINRA/SIPC, 18565 Jamboree Road, Suite 200, Irvine, CA 92612, (844) 4-SHOPOFF.
