32A — June 18 - July 22, 2021 — M id A tlantic Real Estate Journal


M id A tlantic R eal E state J ournal

ontinued frompage 2A Understanding the potential advantages of . . .


• $250,000 in a NNN dialysis facility DST portfolio with loca- tions nationwide • $500,000 in a DST portfolio of NNN dollar stores Overall, the 200% Rule al- lows the couple to identify these seven possible options within their 45-Day period. The DSTs are all packaged and ready to go with closings that can easily close within a week. The couple uses the remaining time to conduct more research and due diligence on the NNN Dollar General and KFC. In the end, they decide to buy the KFC for $1.2 million, but they like the diversity of being about to buy a $500,000 DST interest in a portfolio of dollar stores versus a single location. The remain- ing $300,000 is spent in the two apartment DSTs. In this case, the ability to leverage the 200% rule was advantageous in giving the couple more options and more time to make a final investment decision. The outcome also was successful in that their 1031 Exchange was fully executed, and their $2 million is now invested across a diversified portfolio of multiple different income-producing properties versus only one or two. How- ever, it also is important to note workstations to employees, without the pressure of having a permanent space that they have to report to everyday. Ergonomic seating, printers and efficient copy machines are all necessary for effective work but not always present in the home office. Co-working spaces that offer hot desking provide employees with much needed socialization in a safe and controlled environment, where they are able to interact with people face -to (masked) face. Under the guidance of a facility manager implementing a hoteling workplace strategy, getting employees back into the office based on their daily needs is easily attainable, and successful for the productivity and profitability of a business. Flexibility is key in a work- place strategy, and supports employee comfort during the workday. Some days call for col- laboration, while others call for independent working, where others need remote connectiv- ity. Sheh attributes some of her success to the fact that clients are choosing to be there; they are not forced. Another winning example client Sheh sites: International Pharma com-

that every situation is unique. Individuals should review all three 1031 identification op- tions to choose the rule that works best for your particular situation as well as always should speak with their CPA prior to making any decisions. Dwight Kay is founder & CEO and Betty Friant is senior VP with Kay Properties. About Kay Properties and www.kpi1031.com Kay Properties is a nation - al Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the mar- ketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate expe- rience, are licensed in all 50 states, and have participated in over 15 Billion of DST 1031 investments. This material does not consti- tute an offer to sell nor a solici- tation of an offer to buy any se- curity. Such offers can be made pany needs safe space to con- duct interviews for hiring locally, EnMasse provides a clean, safe office space for that to happen. This small teamhas a private office, private coffee pot, private meeting space and feels very safe and IN CON- TROL of their environment. Client is empowered. She goes on to say that hot- desking offers more than a desk space because it offers safe interaction with other people. These interactions could be socially- distanced meetings, seamless audio and visual technology hookups for telecon- ferencing and so much more. And while comfortable at times, working fromhome saves short- term on money, but seems to decrease productivity. Since so many organizations have closed their doors out of fear of re- opening, employees are looking for safe work environments to continue on with their produc- tivity. Prior to COVID-19, Sheh said that EnMasses’ statistics showed that out of the facility’s options, employees g private of- fices 60% of the time and 40% were using hoteling. However, since COVID-19, 80% of people are utilizing hoteling services

only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum pay - ing special attention to the risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details re- garding your situation. There are material risks associated with investing in real estate securities including illiquid- ity, vacancies, general market conditions and competition, lack of operating history, inter- est rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential ad - verse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the en- tire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Servic - es, member FINRA, SIPC, Of - fice of Supervisory Jurisdiction located at 582 Market Street, Suite 300, San Francisco, CA 94104. MAREJ and only 20% are using private offices. If a facility manager wants to transform their workplace strategy to include hotel sched- uling or hot desking and create a COVID-safe environment, they should reach out to an experienced design team to facilitate the transition. With designers and facility managers working together, workplaces can provide hoteling options, similar to coworking spaces, to improve productivity, accessi- bility, and safety for employees. It all comes down to successful workplace strategy, like that of EnMasse Facility managers should feel confident that with hoteling, the workplace can continue to adapt during the coronavirus pandemic while having employees thriving in a safe environment. Casey Murphy is senior interior designer & project manager with HF Planners. MAREJ Fluker, D. F. (2020, April 11 ). New Survey Returning to the Office. Glassdoor. https://www.glassdoor.com/ blog/new-survey-return-to-the-office/ Alberto Di Risio, A. D. R. (2020, July 3). Global Coworking Growth Study 2020. CoWorking Resources. https:// www.coworkingresources.org/blog/key- figures-coworking-growth

Hypothetical Example: Expanding your options A married couple sold their manufacturing business that included the sale of the prop- erty that housed the business, giving the couple $2 million to invest in a 1031 Exchange. The couple plans to retire and both agree that they don’t want a replacement property or properties that will require hands-on management. The husband wants to buy a Triple Net Leased (NNN) fast food res - taurant for $1.2 million, while the wife is in favor of a $1.5 million NNN dollar store. Both properties are listed on the 45- Day Form, bringing the total to $2.7 million. They decide to use the 200%Rule, which allows for up to $1.3 million in additional property listings. The couple agrees to split the remaining $1.3 million across multiple DST investments, and they choose to identify: • $100,000 in a multifam - ily apartment DST property located in Denver • $200,000 in a multifam - ily apartment DST property located in Dallas • $250,000 in a debt free DST portfolio of NNN leased pharmacies and e-commerce distribution facilities offers 20 seats (3 offices, 8 desks), but an additional premium fee for each of the 100 people authorized to use those seats. Corporation sends EnMasse a list of personnel coming for the day, with Pho- tos, so that usage can be traced and tracked if necessary. (No unauthorized people may enter daily). Permitted M-F, 9-5 only. En Masse offers the service of what would be a very complex scheduling matrix. This saves the corporation the headache and cost of hiring a full-time employee to perform this task, and has a highly ex- perienced concierge performing the task. Benefits While working from home may have its perks, like the ability to wear sweatpants to a meeting or eradicating a time-consuming commute, very few home offices can provide a fully functional workspace. Employer review site Glassdoor actually found that 72 percent of employees are ready to get back into their office space due to a variety of needs that work- ing from home does not cater to (Fluker, 2020). Hoteling offers immediate need-based

as the gross price does not exceed 200% of the fair market value of the relin- quished property (twice the sale price). It is typically used when an investor wants to identify four or more properties. This is the most commonly used rule for investors considering DST investments, because of the flexibility in being able to list multiple properties to build a diversified DST portfolio. The minimum investment amount for DSTs typically starts at $100,000 whereas most com- mercial real estate properties are priced above $1 million. So, for an investor who has $1 million to reinvest, they could opt to put all of that $1 million into one DST (which is typically not recommended even when the DST has many properties inside of it), or they can divide that $1 million into as many as 10 completely separate DSTs. An important mistake to avoid is to make sure the list of identified properties does not exceed the 200% limit. The IRS is a stickler for rules. If the combined price of the identified replacement properties exceeds the 200% maximum limit – even by a fraction of a percent – it won’t be accepted. This supports social distanc- ing as well as reduced indoor densities recommended by the CDC (Fluker, 2020). Another option is to reconfigure desks to outward facing perimeter positions. These concepts offer both physical distance as well as piece of mind for all coming into a space. Scheduling Services are a huge benefit to the co-working type of facility that utilizes hot desking. HF Planners, LLC asked for insight from client Merri Sheh, Owner of EnMasse Coworking in Mor - ristown, NJ. Merri operates a thriving coworking space that “redefines coworking by offering entrepreneurs, re- mote corporate employees, and small & large business owners the opportunity to network, connect and col- laborate in a professional yet warm and welcoming environment.” Sheh uses an example of a type of client that has grown since the start of the pandemic: An American corporation needs office space for approxi - mately 100 people, but on a rotating schedule. EnMasse

continued from page 26A The New WFH – Working from Hoteling . . .

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