136: The First Single-Property REIT in the United States with Stephane De Baets
On this week’s episode of the InvestFourMore Podcast, I speak with Stephane De Baets, who has created the first single-property REIT in the United States: Aspen REIT. Stephane has a ton of experience with large commercial projects in Europe, Asia, and the United States. His company bought a resort in Aspen Colorado, refurbished it, and now they are offering it as an REIT (Real Estate Investment Trust). On the show, we talk about how Stephane became so successful in real estate, why he started this REIT, and how it works.
How did Stephane get started in real estate?
Stephane was born in Belgium but made his way to Asia in the 1980s when they had a bad recession. His job was to restructure the debt on failing hospitality companies and make them profitable again. He actually ended up starting his own bank in China and bought many hotels in Asia. He bought distressed assets, made them profitable, and sold them, much like flipping houses…but on a huge scale! Stephane took his strategies to the United States, buying distressed properties in the hospitality industry.
Why did Stephane want to start a single-property REIT?
In Asia, Stephane created a number of single-property REITs. Most REITs have a number of different properties in them. They could consist of malls, office buildings, apartments, or even single-family homes. When someone invests in an REIT, they are usually investing in the manager and hoping they do a good job. With a single-property REIT, there is only one property. You do not have to rely on the manager to pick good investments because there is only one, and you know what it is. Before the Aspen REIT was created, there were no single-property REITs in the United States.
What is the Aspen REIT?
Stephane and his company bought an Aspen ski resort seven years ago. The resort needed money, and he saw a tremendous opportunity to add value. They put about 50 million dollars into the property and are constantly improving it. It is a destination for the rich and famous and a very high-end place. Stephane created the REIT so anyone could invest in part of the property. The REIT is listed on the New York stock exchange with a minimum investment of $2,000. The details on the property, as well as numbers on profit and loss, are all available through AspenREIT.com. The expected return is about 5.8% based on the strong A class financials of the property.
What are Stephane’s plans for the future?
Stephane plans to do more single-property REITs in the United States. He prefers properties that he can add value to that will eventually become strong A class performers. As for the Aspen REIT, there is no plan to sell in the future, but he says if the right offer came along that would benefit the shareholders, they would sell it. I asked about the possibility of getting preferential treatment at the resort as a shareholder, and unfortunately, that does not happen. However, he states the shareholder meetings are something you do not want to miss!