In this webinar, Ben Matheson highlights the impressive track record of the Integris team spanning more than 1,000 full cycle assets.

Webinar Highlights

• The “dual decision role” that OZ investors face, including both the asset and the manager.
• The track record of Integris spanning multiple decades and more than 1,000 assets.
• A review of the Vegas landscape, and the Dream’s location at the south end of the Las Vegas Strip.
• The unique perks that come along with investment in the Dream Las Vegas fund.
• Summary of the experienced leadership team in place with deep experience in Las Vegas.
• Live Q&A with webinar attendees.

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

• Visit IntegrisInv.com

Webinar Transcript

Jimmy: Ben has a presentation for us on a really intriguing piece of property that is being offered by Integris Real Estate Investments.

Ben: Thanks, everyone for joining us. My name is Ben Matheson. I’m the Director of the Private Client Group with Integris Real Estate Investments and we’ll get through our obligatory disclaimers. I’ll probably spend the most amount of time on this slide, who is Integris Real Estate Investments? I think so often people forget they really have a dual decision-making role when they’re looking at QOZ opportunities.

Obviously, the first inclination is kind of to jump to what’s the asset? Let me see the deal and let me jump into the metrics of the deal. But, you know, the other part of that decision is, who are you going into business with? Because when you make a QOZ investment, it’s a long-term commitment. These are 10-year programs to see the maximum benefit. And oddly enough, there’s sponsors out there who haven’t been in the business for 10 years. So you really have to ask yourself, you know, if I’m gonna make a 10-year investment, a 10-year commitment to a firm, you know, what I like to have someone who’s at least been around for 10 years and seen a couple of real estate cycles.

So we’ll jump to the next one here and say, hey, you know, how long have you guys been around and who are you? Integris, a 30-year track record backing up the Integris Group 1033 full cycle assets, not as important here as a 2.8-year hold. Obviously with the QOZ has been a 10 year, but I think a 30-year track record is meaningful. You know, we’ve been there, done that, seen a few things. So, you know, I think given the choice not to say, you know, I can translate this out into, you know, basis points or, you know, difference in return.

But at the end of the day, you know, I think 30 years is better than just a couple of years, to translate it to a real-world example, I mean, if you needed some kind of medical procedure, I really don’t envision anyone calling their health insurance company or calling the doctor’s practice and say, “Hey, I hear I need heart surgery, who is the least experienced surgeon you have on staff because I’d really like to have him do the job.” Not something, I think, you know, most people would do, so give that some consideration.

Something interesting, too, I think that sets us apart from others is how we capitalize our deals. In this instance, the capital raised by Integris, from individual investors has the opportunity to be paired up with institutional partners. For example, on our deal, there’s 100, and, you know, all total, all sources about $100 million worth of equity.

Now, for this particular offering, we’ll be raising $25 million, a good portion, which is already spoken for. But let’s say there’s, you know, a tad over $19 million still available. The rest of that, realistically, is probably going to be made up by institutional partners. Now, how does that benefit an investor? You know, no guarantee of success, doesn’t mean anything magical is going to happen. But you do have someone else potentially committing, you know, 50, 75, $100 million to come in on a side by side basis, Pari Passu, you know, same stature, who has the resources to do a deeper dive, who has potentially a team of accountants, a team of underwriters, who can look over our shoulder and underwrite the deal.

So there’s an opportunity there where, you know, does it mean the world’s perfect and if they sign off on it everything’s perfect? No, but I think you can maybe sleep a little bit better at night, knowing that, you know, someone else has looked over our shoulder underwritten the deal and they’re willing to strike, you know, stroke, a big, big check. So take that for what it’s worth, but it’s just one more unique aspect of the offering. As far as the offering itself, we’re going to be a little bit of an outlier only because we see so many deals in this space into more commonplace assets like multifamily. You know, I don’t think there’s any shortage of multifamily deals out there in the marketplace. So being in the hospitality sector, an opportunity potentially to diversify, not just in your QOZ holdings or potentially diversify against other holdings that you have. But, you know, why hospitality, why would you even look at it?

And if you’re reading the headlines and seeing the, you know, exponential rent growth that we’ve seen over the last couple of years, you know, a lot of people would look at that and say, “Wow, that’s, you know, that must be a sector to be in, that must be the place to be.” But you know, devil’s advocate says, “Well, you have to look at it and say, ‘Okay, we’ve had a couple of years of just massive rent growth. How long can that continue? You know, am I buying at the top of the market? You know, did I miss it already? What happens if rent growth can’t continue to grow at that rate? You know, where is the affordability ceiling, if you will?'” I mean, at some point, you know, rents can be pushed to a point where we hit an affordability crisis, and maybe we’re already there, maybe we’re not. But essentially, you start running out of people who could afford rent, so maybe hospitality is a worthwhile sector to look at.

“Wall Street Journal” article, pop up here, right here says, Apollo said it sees Las Vegas properties positioned for recovery and long-term growth. I think there’s an opportunity in the hospitality space to jump into one that, you know, maybe the biggest gains haven’t been seen yet, maybe there’s some more upside to the story. Our assets are going to be located less than a mile, I think it’s eight-tenths of a mile from new Allegiant Stadium. You know, our asset is located in one of the most heavily traveled locations, time after time, you can see it on the Forbes list or other travel list, as you know, a top 10 or a top 25 travel destination. So here’s an opportunity to come in and participate in an asset in one of the top locations in the country and most visited locations. Speaking of location, you know, here’s what we are.

You can see down at the lower portion and the blue, that is the site location for the Dream Las Vegas Project down there by Mandalay Bay, you can see Allegiant Stadium, back there in the background, and we are on the south side of the strip. The location is very interesting, for a couple of reasons. One, you can also see proximity to the airport, we’re gonna be one of the closest properties to the airport, in a boutique-style environment for those folks that you know, want to fly in, maybe they’re coming in to catch a show or go to a game at the stadium, and they want a path of least resistance. They don’t want to land at the airport and have a 45 minute trip and traffic to their hotel. Then, you know, heard their way like cattle through the lobby of a, you know, three or 4,000 room, mega hotel, you know, wait for a series of banks of elevators to get up to the room, you know. They want a more curated experience, a smaller boutique, quieter experience.

And then, you know, if you are attending something at the stadium, you know, the ability to just simply say, “You know what, we’ll just walk it, tonight’s a night for a walk.” So once you’re clear of the massive crowds in Allegiant Stadium, you’ve got a short stroll back to the hotel and literally, you know, we could probably equate it in a measurement of some degree of seconds, you know, to get up to your room from the front door versus that long haul from the other. And then now that you can see where we’re located in Las Vegas, I want to kind of jump in and address the 800-pound elephant in the room, if you will.

A lot of people hear the word Vegas and immediately, you know, the connotations come to mind, you know, if you play the word association game, I’m gonna say Vegas, you say the first word that comes to your head. And you know, a lot of people say gambling or Sin City or risk. And I think it causes some people to potentially discount the deal and go, “Oh, okay, there’s a higher degree of risk there, it doesn’t meet my risk profile, maybe that one’s not for me.” But then on the same token, you know, I’ve been to Vegas, I’ve visited many times, and I’ve yet to hear anyone walking out of the casino say, “Wow, I have no idea how those people make money.” It just doesn’t happen. So that, you know, risk thing that pops into your head, usually, it’s the risk to, you know, the patrons’ wallet, or you know, the risk to someone walking into the hotel, it’s not the risk profile for the hotel itself for the actual investment.

So, quick timeline, we’re gonna have about a 24-month construction period, then we’ll get the hotel stabilized. And at that point, you know, we look to start our income distributions for it. I’m gonna glance through these real quick, this is interesting, not a decision point. I can’t say it’s a reason to invest but just an interesting dynamic. When you become an investor in Integris DLV, you become an investor but you’re treated like an owner. And this is just a quick graph of some of the perks that come along with being an investor. So you are an investor but you get treated like an owner and definitely some VIP treatment to individuals that invest in the opportunity.

Last couple things I’ll part with, here’s the team that we’ve put together to build this project. And the project lead, this is where I go, you know, choose who you’re going to do business with. Our project lead, Bill Smith, was the lead on CityCenter in Las Vegas, which at the time, was the largest privately financed construction project in U.S. history. I mean, that’s a pretty powerful statement, so, you know, in addition to the Spa Tower, and Liberty Place and Beau Rivage, you know, the individual responsible for the single largest private construction project in the country is the one, you know, that has taken the lead role on this deal.

Also McCarthy, the contractor, they have a little bit of experience in that town, that’s a bit of an understatement but they also were the ones that constructed Allegiant Stadium just down the road. So, again, just loads of experience coming into this deal. And then finally, you know, here’s our rendering of what we expect the outcome to be. There’s the hotel there in the foreground and Allegiant Stadium in the background. Another view, you can see the airport off in the distance. And then the last thing, the metrics on the deal, I didn’t spend a lot of time on this in the presentation, frankly, because you can pull all this right from the PPM, and I assume that everyone’s considering a QOZ investment is reading their PPMs. You know, some sponsors have shorter ones than others, you know, ours is fairly lengthy, we are not shy about disclosing every bit of information that an investor would need.

I will say this, we don’t lead or we don’t mark it with our IRR or equity multiple, you can find that on page 49 of the PPM and you can get a copy of that PPM at integrisinv.com. I will say this, though, I think we did it the right way in formulating those multiples and IRRs, our exit assumption is a number. So in other words, the number that we’re using as our exit value on the hotel 10 years from now is a number that has had comparable sales, right around that number recently. So in other words, we’re not coming up with, you know, a pie in the sky number for 10 years from now, we literally used our exit valuation as a number that is equal to, you know, comparable sales that have occurred in the area.

So I think that, you know, should give some folks a little confidence that we’re, you know, we’re not stretching, you know, we’re not using funny math or fuzzy math to come up with those figures. So I would encourage people to take a look. Investment minimum is $100,000. That was higher, we lowered it a bit simply because we want people to have choices, the ability to diversify their QOZ investments, and yes, you can choose more than one fund for your QOZ investment. So we’ve lowered the minimum for folks that had, you know, 200,000 or 250,000, by lowering ours to 100,000, it gives them the opportunity to participate in ours and potentially another deal as well.

Jimmy: Ben, thank you, that was awesome. Really appreciate you participating with us today. Had a question in the chat a minute ago. This was the same deal that was called Shopoff a few months back and is that right? You guys just rebranded as Integris, I believe, but I know at least one person recognizes this as the old Shopoff name deal.

Ben: It is. And William Shopoff is involved in this and the Integris brand was launched as a path for direct retail investors, where we trimmed out, you know, expenses that would normally be found freezing financial intermediaries or other distribution points. And we just trimmed it down and cleaned it down and made a nice clean package for investors to come, you know, and participate directly in this project. So yeah, a lot of the metrics are the same.

Jimmy: No, great. We’re over time, but we do have two questions I want to get to if we can get to them really quickly, Ben.

Ben: Yeah.

Jimmy: One is, I’m sure a lot of people are wondering the same thing. How does this fund avoid the Sin business rule? One of the Sin businesses that is expressly prohibited by the regulations is casino and gaming I believe. I’m not exactly sure how that’s termed, but can you address that?

Ben: Yeah, that was a real easy one, we got a tax opinion from Baker Tilly, and we are not going to operate a casino and they are correct. What we’re going to do is lease that space out. So you are not investing in a casino but you’re receiving some of the benefits because we will lease gaming space to a gaming operator within the hotel. I think it’s a better solution for our investors, keeps everything clean and nice and tidy. You know, there’s still some financial incentive from having it on property, but the deal is not you know, strictly dependent on that. So it was a great solve for it and accretive to investors.

Jimmy: That’s great. When I first met Bill about a year ago, he was telling me about this project. He said, “This is a very big hotel by hotel standards, but by Vegas standards this is actually kind of a smaller boutique hotel.” That kind of leads into our last question here I have for you is, how many rooms will the hotel have?

Ben: Yeah, great question. 525 keys, which yeah, it’s a good size hotel, but by Vegas standards, I mean, that’s as boutique as boutique can be. That’s the other reason I think we’re gonna fit well in the marketplace. There’s a lot of people that, you know, want ease of access and to come in and have a, you know, more curated personal experience. The last thing I’ll throw out there is our operator, and if you boil it down, this is really just a built-to-suit project. You know, we’re building it, we have a contract, you know, operator and Dream Hotel Group, I would think anyone who’s stayed at a Dream property is probably on our website right now downloading the PPM.

We didn’t have time to go into that but they are just an amazing organization and I think Dream Hotel is more Vegas than half the hotels in Vegas. But they pull it off with style, they’re an amazing organization, they’ve got some skin in the game. I would put a challenge out there that, you know, spend a couple bucks, go spend a night in a Dream Hotel, they’re all over the country and internationally. Spend the night in a Dream Hotel and I would be absolutely shocked if you don’t wake up the next morning and want to download the PPM for this offering.

Jimmy: That’s a bold claim, but I like where your head’s at there, Ben. I love it. We got to cut you loose there, we’re a few minutes over. Got to get to our next presenter but Ben Matheson, Integris Real Estate Investments, got the link to integrisinvestments.com in the chat if you want to learn more. Thank you so much, Ben. Appreciate your time.

Ben: Thanks, Jimmy. Always a pleasure.

Jimmy: You bet.