Family Office Elite Spring_16

REAL ESTATE IN THE
FAMILY OFFICE PORTFOLIO
How to Add Quality Real Estate to Your Portfolio
DJ Van Keuren is a Director for a Real Estate Family Office
based out of Colorado. He has over 25 years of experience
in real estate, finance, fund management and investing.
DJ is a graduate of Harvard University, author of “real
estate investing for family offices”, founder of www.
usfamilyofficerealestate.com, and sits on many Family
Office panels regarding real estate investing for Family
Offices.
Real estate is an important part of any portfolio, especially
for family offices. Real estate has many benefits––from
the use of leverage, tax-free growth, and tax deferment
to depreciation and mortgage interest deductions, and
especially the opportunity for families to build legacy
wealth. A good property in a good location can be a longterm
family asset, providing cash flow, appreciation, and
tax benefits for generations to come.
Because of these benefits, the question then becomes:
How can a family office invest in real estate and maximize
the benefits that real estate has to offer?
The options available to family offices are 1) direct
investing, (or a subset of direct investing), 2) fund
investing, and 3) investing through publicly traded
entities such as REITS or individual stocks of real estate
and real estate-related companies. For the purposes of
this article, we will focus on direct investing through
joint ventures, separately managed accounts, limited
partnerships, and club investing rather than when the
family or family office invests directly and manages the
property themselves.
Choosing the right real estate asset to invest in is more
of an art than simply investing in what appears on the
latest broker flyer or what is offered during a phone call
from a real estate operator. To choose the proper asset
and opportunity, one of the best ways to add real estate
to your portfolio is to partner with another family office
that has created its wealth through real estate. After all,
as a family office, this group will also understand the
DJ Van Keuren
Arsenault Family Office
challenges facing your family or family office related
to estate planning, transferring wealth to subsequent
generations, building a business, and creating or
preserving wealth. The question then comes down
to: How does a family office evaluate a potential real
estate partner?
Although you may want to add a few more items to
your list when evaluating a potential partner, the
following are five items that real estate investment
banking firms and institutions consider before
investing with a real estate partner. This should help
with your evaluation of a partner as well as touch
on some of the areas that should be explored by the
family office during the due diligence process.
The five areas are: partner’s experience, partner’s
strengths, partner’s track record, the economic
viability of the investment(s) or opportunity, and
alignment of interests with your potential partner.
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FAMILY OFFICE ELITE MAGAZINE