April 2021
Vol 8 | Issue 581

Q&A with David S. Rose of The US Real Estate Market

Founder & CEO

Principal Series:

The US Real Estate Market (“USREM”) is a new capital markets platform developed to provide family offices with the benefits of direct investment in professionally managed, tax-advantaged, Core, real estate assets with the potential of a resellable instrument.

Join us for a private Family Office Insights Webinar introducing
The US Real Estate Market – a unique new platform for investing in Core Real Estate

April 15, 2021 at 2:15pm-3:15pm ET

RSVP & Confirmation Required



Previous attempts at fractionalization and crowdfunding have suffered from a mismatch between the size of the investable real estate market and the comparatively small pool of accredited investor risk capital. USREM is a platform intended for large family offices and the institutional market, delivering the core, stabilized assets that make up the majority of institutional portfolios. USREM’s focus on professionally managed, stabilized assets allows it to avoid expensive and restrictive sponsor-led or general partner models.

This “sponsorless” model will allow investors to make their own asset selection decisions while ensuring that the value of the asset itself is maximized through professional management and external, third-party oversight.

Family Office Insights is a voluntary, “opt-in” collaborative peer-to-peer community of single family offices, qualified investors and institutional investors. Join the community here www.familyofficeinsights.com

What’s wrong with public REITs?

For buy-and-hold retail investors, public REITs are a suitable and inexpensive way to access real estate. However, their strong correlation with public equities markets can make them inappropriate for larger investors who want to maintain separation between the performance of a particular asset (alpha) with the gyrations of the broader market (beta).

Public REITs have other, less publicized problems. The “dealer rule” prevents a public REIT from selling a property within five years of acquisition without surrendering capital gains. Effectively, this can lead to wide discrepancies between a property’s trading value and nominal Net Asset Value.

Why does the US Real Estate Market focus on Core properties instead of Value-add or Opportunistic properties that could deliver higher returns?

Because of their stabilized income potential and history of both capital appreciation in up markets and capital preservation in down markets, Core and Core Plus investments are foundational to an institutional real estate investment allocation. Historically, Core real estate has delivered a substantial cap rate premium over 10 year Treasury notes, with an average spread of 3.2% over the last fifteen years. Core real estate as an asset class has achieved equity-like returns with bond like volatility, offering outstanding risk-adjusted performance over a twenty-five year period compared to stocks and fixed income.

Why are properties in the USREM market offered with 100% equity and no debt?

By removing the risks associated with debt servicing, investors in a USREM property can focus on the performance of the particular asset. Studies have shown that adding leverage to a core-stabilized property does not meaningfully improve returns in strong markets, but it does add significant downside risk in weak markets. Because the underlying properties are themselves unleveraged and maintained in corporate ownership, investors desiring leverage are free to use their Property Shares as collateral on an individual basis for personal loans.

David S. Rose of The US Real Estate Market

David is the third generation of a U.S. real-estate family that has been developing, owning and managing large-scale residential and office properties for over a century. Mr. Rose has over 50 years of real estate and entrepreneurial experience and was honored with the Outstanding Builder Award from the Associated Owners and Builders of New York. After beginning his career as Urban Affairs advisor to the U.S. Senator Daniel Patrick Moynihan, Mr. Rose spent over a decade at Rose Associates developing new properties and working in New York City, Boston, Washington, D.C. and other markets. As one of the pioneers in applying new technologies to real estate for over 40 years, Mr. Rose has been responsible for many PropTech innovations in the industry, including some of the first computerized real estate sales offices, multiple listing platforms, construction punch list management systems and property-based social networks.

He is the co-founder of the AREA PropTech Accelerator and serves on the Technology and Real Property Database Committees for the Real Estate Board of New York. Since 1991, Mr. Rose has been the Managing Partner of Rose Tech Ventures, through which he has founded or funded over 100 venture companies, resulting in Red Herring magazine describing him as “Patriarch of Silicon Alley.” An Inc 500 CEO, Mr. Rose is the founder & Executive Chairman of finance industry platform Gust, Inc. and the founder & Chairman Emeritus of New York Angels. Yale BA, Columbia MBA. Contact David: david@usrem.co