The Opportunity Zones Podcast is now on YouTube!
In this webinar, Bill Shopoff discusses the Integris DLV QOF, which will provide the equity for construction of the new Dream Las Vegas hotel on the southern end Las Vegas Strip.
- An overview of Shopoff Realty, including their track record of more than 1,000 full cycle assets.
- The firm’s value creation process, culminating with the capture of event-driven capitalization.
- An overview of both the hotel and gaming operations for the Dream Las Vegas at the south end of the Las Vegas Strip.
- How this project implements a “condominiumized” structure to navigate the OZ regulations and develop a casino.
- Timeline for the Dream Las Vegas, including the opening of the property, distributions to investors, and targeted sale of the asset.
- Project location and renderings for the Dream Las Vegas, located near McCarran International Airport, Allegiant Stadium, Mandalay Bay, and the Vegas City Center.
- The investment case for Integris DLV, including appealing factors of the Las Vegas market and the stellar reputation and track record of the partners in this OZ project.
- An overview of fees, projected returns, and minimum investments for the DLV project.
- The Integris DLV Founders Club, a unique benefit that provides VIP benefits for investors in the project.
- Q&A with webinar attendees.
Featured On This Webinar
- Bill Shopoff on LinkedIn
- Integris DLV QOZ
- Allegiant Stadium
- T-Mobile Arena
- Welcome to Fabulous Las Vegas Sign
Industry Spotlight: Integris Real Estate Investments
Headquartered in Orange County, California, Integris Real Estate Investments is a national, multi-disciplinary real estate investment firm focused on generating appreciation through the repositioning of commercial income-producing properties and the entitlement of land assets. Their Opportunity Zone offering invests in a Dream Hotel property development on the southernmost end of the Las Vegas Strip.
Learn More About Integris
Jimmy: Well, good to see you, Bill. How are you doing?
Bill: Good to see you, Jimmy. Nice to see you again. Thank you. Appreciate it, Jimmy. Always a pleasure to be here. I’m Bill Shopoff, and I am president and CEO of Integris Real Estate Investments. And today I’m here to talk to you about a very exciting project, which is our Integris DLV Opportunity Zone Fund. We have the pleasure of presenting an opportunity to invest in the development and ownership of Dream Las Vegas, a project that we recently got approved through Clark County, earlier in October. We’ve been working on this project for about two years, and ready to move forward with it. We can pass through the required disclosure slides, we’ll flip through these, but they’re important but we’ll talk about Integris Real Estate Investments.
The suite of companies that I’m involved in has been involved, I’ve been in ownership and control for 29 years and our focus is transforming opportunity and value. I’ve actually completed over a thousand real estate investments full cycle that is, we’ve acquired them, we’ve implemented our business plan, and then we’ve sold those assets, relatively short hold period, it doesn’t really apply here in the QOZ business because some of those have been very, very quick, but we have held many assets longer or tenancy has been shorter term. But we certainly have held enough to know how to own and operate long-term in the fashion that we will do here in the Opportunity Zone business.
So, I want to tell you a little bit about Dream Las Vegas. The project is located on the Las Vegas Strip, the south end of the strip down by the Mandalay. It’s 5.25-acre site, it’s anticipated to comprise a 19-story hotel tower, with about 500,000 square feet of hotel space, 26,000 square feet of gaming. And I will get to that in a moment because I’m sure people are scratching their head and wondering about if they know a lot about the OZ business, about [inaudible 00:02:20] business within the OZ. And then parking and other associated ancillary things for owning and operating the hotel. The site is located within a Qualified Opportunity Zone. Full entitlements were received by the Clark County Commissioner’s court in October 2021. Our gaming operation is anticipated to house of 250 slot machines, 20 table games, and a sports book. The hotel include a 526 key luxury lifestyle hotel, featuring food and beverage venues, the pool, a day club, retail venues, and full-service fitness.
The issue with the gaming is we’ve worked with our tax and accounting advisors to work through a condominium structure, which qualifies under the… that structure will qualify under the QOZ rules. We actually don’t operate the gaming, it will be done on a lease with an operator. We’ve been able to keep that income clean from an OZ basis. The construction will start in Q2 in May of 2022, operations will begin in 2024, and then we assume an exit, you know, Q4 of 2032. Here’s a photo of the location, and apologize that this photo is somewhat out of date, but one of the issues of being adjacent to the airport is how hard to get updated photographs. But you can see the Allegiant Stadium that’s now, obviously, fully constructed and operational. Our property is sitting down by, Harley Davidson is our neighbor to the south, you can see the Mandalay, the T-Mobile Arena, Northerly. We’re immediately adjacent to McCarran Airport, and that’s actually Signature Aviation to the right of us, that’s also where JSX, one of the small commuter operators goes to, and I’ll give my plug for JSX. If you’re going to Vegas or anywhere in the West Coast, because they’ve now expanded to the East Coast, and want a really great flight experience, JSX is it, and they land right next to this so you’re really from getting off the airplane to getting to the front door Dream, you’re probably five to seven minutes away so much closer than going up the strip.
So, really awesome location, walking distance over to a Raiders game, or some of the others, some 200 events a year, they’re going to take place in Legion stadium. So, we think that’s real driver for why Dream and why we would be here, so. Why invest? First of all, you’re gonna make the decision and you’re going to invest in an Opportunity Zone, but why invest in Integris DLV Opportunity Zone? I think, first of all, it’s an unprecedented Fund in the Las Vegas market and it’s in a prime location, so we love that. Dream Hotel Group is contracted as our operator and manager, it’s one of the premier lifestyle management companies in the hotel space. They’ve been really working on this project with us for more than two years. This will be, I think, safely to say, the flagship hotel for Dream. And so they’re staking a lot on this with us. Clearly, with Dream, I have to use the play on words, a Dream team of real estate experts. Obviously, my firm, which is got long tenure, my partner, co-developer, Contour Real Estate, third-generation Las Vegas family, world-renowned general contractor, McCarthy Building Companies. About 150-year-old company, most recently in Las Vegas completed the Allegiant Stadium, home of the Raiders, is about a $1.9 billion project. And then Circle Hotel, which is about a 900 room project that they completed earlier this year.
I was fortunate enough to add to my firm, Bill Smith, who’s joined me as my senior vice president of design and construction last year, and Bill has had a really illustrative career in the hospitality space. He’s been involved in over $18 billion of construction and is among other things. Bill was the lead for MGM on the CityCenter project, where the ARIA hotel is in the crystal shops just up the road, which is a $9 billion project. And then we’ve got DLR Group, a world-famous architectural firm, location, location, location. Were 0.8 of a mile to Allegiant, we’re 1.7 miles to T-Mobile, we’re 0.2 of a mile to the Mandalay Bay Conference Center, about three-quarters of mile to the actual hotel, and less than 2 miles to city center. And like I said, you know, five to seven-minute drive from Signature Aviation in JSX, the regional commuter airline. So, here’s kind of a quick overview on the project. I’m sorry, I’m running through this, given 15 minutes, I got a lot to cover here.
So, 506C, private placement will have some institutional co-invest, it could be up to 90%. This raise is $25 million, representing about 15% ownership in the project, the total project is $536 million with $363 million of debt. The minimum investment is $100,000. You can invest all capital types, both short and long-term capital gains, it doesn’t have to be QOZ eligible capital, meaning capital gains. But to qualify for any QOZ benefits, you would need to use capital gains. We anticipate distributions to commence probably in 2024 or 2025. We do believe that between operations and refinance proceeds that will have sufficient proceeds to pay any income tax that you’ve deferred. The preferred return is 7%. I think I talked about the anticipated exit is late 2032. And then the transaction structure is a 75% to the investors after the 7% return, so you get all of your capital and the 7% preferred return before the general partner, myself, and my partner’s share, and you get 75% and we get 25% until we achieve a 15% IRR, and then it’s a 60%, 40% sharing arrangement. I’m not going to go into great detail on this but we have the Integris DLV founders club.
So, for those of you that invest at various levels that requires up to $250,000 and up so you can get into the project at a minimum of 100, but if you want to be part of the Founders Club, and have full VIP, you got access to Dream Las Vegas and other Dream hotels, you have a menu of opportunities available to you. And we’re happy to discuss that in greater detail. Certainly, not the primary reason somebody would invest, but it’s a little bit of the icing on the cake. So, here’s some renderings on the project. We are right next to the, “Welcome to Las Vegas” sign. So, we’re going to get a tremendous amount of free advertising on social media. There’s literally millions of people a year that stop and get their picture taken, others a large parking lot in the boulevard. And there’s literally, at any given time, anywhere from hundreds to thousands of people taking their shot, posting on social media. So, we think it’d be a great backdrop with Dream in the backdrop. Another rendering of the entrance to the project, we think it’s a very elegant, kind of, you know, this is a boutique-style hotel. In any other market, this would be a major hotel, but in Las Vegas, it’s going to have a little more intimate feel versus a 4,000 room ARIA where you may have to walk four miles to get from A to B. Our sense is that not everybody wants that experience, and we think that Dream will find its following here in Las Vegas. Here’s one of our two pools, you can see great views of the strip and of the stadium. So, how are we doing on time, Jimmy?
Jimmy: At the end, you’re doing great on time. We wrapped up a minute early, a couple minutes early. So, Bill, where can our viewers go if they want to learn more if they can request the offering documents? What if they’re ready to make an investment, how can they contact you or get in touch to learn more about you in the offering?
Bill: Hey, Ben, you want to jump on for that?
Ben: Yes, the website is up, great information there, it is integrisinv.com. You can find some more in-depth information, obviously, you can request the offering documents and access to, you know, folks such as myself to guide you through the process. So, we’ve got a nice robust system in place to kind of work with folks every step of the way, make sure they have the information they need, you know, assistance with next steps. So, we really do in this vein want to, you know, provide concierge level service. It’s not this, you know, black box that you send your information into, and you’re completely left your own devices. So, it’s a high-touch atmosphere, and there are will be folks here to guide you every step of the way.
Bill: Interested investors can also reach me, the phone number is 84-Integris or you can reach me at [email protected], and that’s Shopoff. And we’ll make sure that if anybody comes direct to me that we’ll get them to somebody that probably can manage that a little bit better than me, Jimmy. But, you know, we’ll make sure that we’re taking care of folks. We’re very excited to participate with you today on the program. And, as always, best wishes to you and your group.
Jimmy: Yeah. Thank you. Happy to have you here, Bill. But we got a couple more minutes, so before I cut you loose here we had a couple questions today about how to access these funds. We had a question just come in. Are you doing an IPO? Do you have a ticker symbol already? So, I just want to make it clear to everyone and Bill, feel free to chime in. The vast majority, the vast, vast majority, like 99.9% of Qualified Opportunity Funds and all of the different funding partners that we have partnered with us on this event today and tomorrow, our private placement offering. So, they’re not offered through your brokerage, or it’s not just like buying a stock or a mutual fund or an ETF, right? There’s a private placement offering that’s offered privately. I don’t know if you have anything else to add there, Bill?
Bill: Well, I think the thing is there’s no value in an OZ to an IPO because you can’t sell your stock, we’ve sold your stock for 10 years. I mean, theoretically, businesses can use the OZ benefit. But I think they’ve generally been used from a private sense, you know, to finally liquidate, you know, some 10-plus years later. So, it is as we far as we know, it’s a private placement business, because there’d be no way to control otherwise if you sold your stock, you disqualify yourself under your OZ benefit and you get a temporary deferral. So, to refresh people that don’t know, you know, what you get is, you get a deferral of taxes, you get elimination if you invest by December 31st of 10% of your capital gains, you have no recapture and depreciation. Still, I think one of the key issues… and no capital gains, no tax on anything that you gain from the investment, whether it’s in the Dream offering or any other OZ offering. So, I think this is something…
Jimmy: So, long as you get it to a 10-year hold, right?
Bill: So, as long as you hold out to the 10 years. So, I think that there’s a great opportunities, I candidly, I’m very excited about the OZ. I’m excited to see people getting it, but I have to tell you the number of people that I talked to, who I think are very financially sophisticated, who do not know about this, I’m talking to a lot of people who are accredited investors. And, you know, I’ve casually mentioned it to them, you know, I’ll mention it over dinner, and the next thing I know, you know, we’re making an investment with them because they realize they’ve got capital gains that we’re gonna have to pay tax on. And, you know, they’re gonna invest in a project like ours anyway. They’re like, “Oh, my God, I don’t have to pay tax today. How amazing.” So, somehow the word has not gotten out on this, like it has on 1031s. So, I think it’s kind of interesting, but, you know, thank you, Jimmy, for spreading the word to people. You do it again.
Jimmy: I’m happy to do it. A couple more questions here. I don’t know if we’re gonna get to both of them or not. But Dane asks, why such a low amount of capital raise up to $25 million or 14.5% of a total capitalized deal of $560 million with debt of $363 million. So, why that debt to equity ratio there?
Bill: Well, it won’t be. The total equity of the $176 million…
This is just one of a couple of QOFs that are going into this project, so they’re side-by-side, they are all side-by-side, they’ll all have equivalent rights. And I’m actually the co-manager on those with some institutional partners. So, that’s a great answer. No, we’re not leveraging to the hilt, we normalize our leverage, but we are doing it in multiple funds with slightly different offering arrangements.
Jimmy: All right. Well, Bill, I think we’ll… Sorry, we didn’t get to all your questions we ran out of time here, but, Bill, thank you again for joining us today. I got to escort you off the stage and get my next presenter up, but I really appreciate the time you gave us today.
Bill: You’re very good with the hook, Jimmy. I appreciate that. Thanks.
Jimmy: Absolutely. Thanks, Bill.
Bill: Thank you.