MICK Law Due Diligence: Current Developments,
Author : sherrill-nordquist | Published Date : 2025-06-23
Description: MICK Law Due Diligence Current Developments Process Opportunities Pitfalls To Avoid BraD Updike llm jD MBA Mick Law PC LLO wwwmicklawpccom Main topics covered 1 Whats happening in retail oriented private placements 2 Recent
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Transcript:MICK Law Due Diligence: Current Developments,:
MICK Law Due Diligence: Current Developments, Process, Opportunities, & Pitfalls To Avoid BraD Updike, llm, jD, MBA Mick Law P.C. LLO www.micklawpc.com Main topics covered 1. What’s happening in retail oriented private placements 2. Recent market developments in real estate & energy 3. MICK LAW due diligence process for real estate & energy 4. What drives program performance and failures 5. New opportunities in 2021 & 2022 Private Placements – Retail Trends 20,000 Form D filings per year seeking $1 trillion of debt/equity capital 195 retail private placements are seeking $20 billion (Source: AI Insight) 59 retail programs closed within the first five months of 2021 Avg. offering period was 352 days 92% target raised (better than 75% mark for 2020) 195 pending retail private offerings 134 are real estate related (DSTs, Funds, QOFs) 32 are private debt/equity 11 preferred stock offerings Look for energy to make a comeback DST Market – Historic Trends 2006 - $3.65 billion (341 deals) 2009-2013 – under $500 million raised annually (20-40 deals per yr.) 2015 - $1 billion (105 deals) 2017 - $2 billion (126 deals) 2018 - $2.5 billion (139 deals) 2019 - $3.4 billion (171 deals) 2020 - $3.2 billion (COVID) (170 deals) 2021 - $1.172 billion (Q1 21) (97 deals in first quarter) Mountain Dell 1031 Equity Board (Q2 21) $2.547 billion retail equity raised 139-day avg. time on market (misleading statistic though, see last point) 28 active sponsors in the DST market 5.09% avg. yr. one return (4-4.5% for MF) DST sector activity MF 42%, Industrial 17%, Retail 10%, Student Housing 14% Sr. Housing, Energy and Hospitality are collectively < 3% of the market Biggest Sponsors – capital raised year to date Inland 19%, Capital Square 15%, ExchangeRight 8%, Cantor Fitzgerald 6%, Passco 7% MICK’s Biggest Concern Supply is getting tight (especially in MF) & reps are selling ahead of the due diligence So .. how did real estate perform in 2020? Total Returns – Real Estate Source: NKF Research (4Q 2020) Source: NKF Research (4Q 2020) Due Diligence – why is it required? Rule 2111, Reg. BI, & FINRA RN 10-22 1. Checking the validity of the sponsor’s claims (RN 10-22) 2. Understanding the risks vs. reward and all possible conflicts (Reg. BI) 3. Is the offering suitable for any group of investors? (Conduct Rule 2111) Third Party Opinion 1. Includes sponsor analysis and deal level reviews 2.
