The redemption plan also states that it will only repurchase shares as liquidity provides, not more than 5% of weighted shares outstanding in any one calendar year. In other words, there could be events beyond your control that limit, or even prevent, your ability to sell at any time. However, it’s worth noting that while other crowdfunding companies suspended their redemption programs during the pandemic, Streitwise was one of the only investing platforms that didn’t pause its program.
To be clear, this isn't unique to Streitwise or its REIT. These are non-traded entities; they don't have a secondary market like public stocks. The downside is they can't be liquidated quickly, but the upside is the access they provide to high-quality investments and top sponsors and developers that were previously only accessible to institutions and the ultrawealthy.
Going mobile: Is there a Streitwise app?
Streitwise launched an iOS app in 2021, allowing investors to manage their investment via the app. They can now view their holdings and returns, graph their returns over time, monitor quarterly reports, and add funds all via the app.
Streitwise risks: Is Streitwise safe to invest with?
We've already covered a lot of the risks investors should consider, but let's take a closer look at them. First off, what you are buying shares of -- 1st Streit Office Inc -- is a separate legal entity from Streitwise or its manager, Tryperion Partners. In other words, if Tryperion Partners were to become insolvent or to otherwise struggle, its creditors would have no legal rights to either your investment in the REIT or the assets the REIT owns.
With that said, Tryperion Partners' management and employees play an indispensable role in running 1st Streit Office, and it would certainly have some impact on the REIT's operation, including potentially interrupting dividend payments; tax document reporting; required SEC filings, including annual reports; or paying vendors and lenders in a timely fashion.
The former of these things, reporting and making payments to investors, would be inconvenient and likely temporary but unlikely to cause permanent harm to the REIT (and therefore to your invested capital) itself. However, an interruption in the REIT's operations that caused it to miss debt service payments could put it in default on that debt, and that could have substantial consequences, including capital losses for investors.
To be clear, this isn't unique to Streitwise/Tryperion Partners and the REIT it manages; this is the same kind of risk you'll take with any other REIT you invest in. The sponsor must execute its job managing the REIT, and if it fails to do so, it could put your investment at risk.
Additionally, let's highlight the risks inherent with this particular REIT one more time: It's small and highly concentrated in both the asset type -- corporate office buildings -- and in tenants, with only a small number accounting for the majority of its rents. The loss of a single tenant could cause significant interruptions in the REIT's ability to maintain its dividend and, at worst, to service its debt. Because of that, investors need to keep a close eye on lease expirations and the company’s ability to diversify its portfolio via additional office-building acquisitions.
That said, the assets it owns are very high quality, its management is experienced, and it pays a high yield, so there's potential for big rewards if you're willing to take on the specific risks built into this REIT.
Because of those features and its low debt level, Steitwise is rated as the best crowdfunding platform for non-accredited investors seeking conservative exposure.
Disclosure: Matthew DiLallo owns shares of 1st Streit Office REIT.