New Brokerage Launches $1B Non-traded REIT

OAKTON, VA-A new broker-dealer firm has formed here with the intention of distributing commercial real estate opportunities to high-net worth individuals. Called Five X Securities, the firm’s plans include the launch of a $1 billion, non-traded REIT, as well as the launch of a $250 million private equity fund that, when levered, would have at least a $500 million purchase power, David Young, principal and CEO of the company, tells GlobeSt.com.

1031 transactions will also be part of the mix: deals will be in the $10-million to $20-million range, with a projected pipeline of one deal or so per month, he adds. “We expect to close on a 1031 transaction within the next few weeks,” he says.

The company intends to start raising funds for the REIT, to be called Mission Residential Property Trust, in September, according to Young. “Its first phase will be private equity, and then once it is registered, it will go public,” he says. For that reason, the company will hold off on raising capital for its private equity fund for the time being, in order to concentrate on the REIT.

Initial investments will be in the multifamily sector. To that end it has lined up one sponsor, Mission Residential LLC, a Washington, DC-area firm. Eventually, Young says, he expects to find sponsors in other commercial sectors such as industrial and office. The criteria will be low fees and alignment of investment interest, he says.

Essentially the company is looking for investment opportunities in high growth areas that are value-add or opportunistic. It is starting off with the multifamily sector because its fundamentals are favorable right now, with demand for apartment space growing and supply relatively stable.

Young was president and CEO of NFP Securities in Austin. Before that, he spent eight years with New York Life Insurance Co. as president and CEO of NY Life Securities and Eagle Strategies, both in New York City.