Our Investment Process

Utilizing a team of knowledgeable and experienced real estate experts, Shopoff Properties Trust identifies prime investment opportunities in our targeted regions that fall into four broad categories: Undeveloped Real Estate; Entitled & Developed Property; Joint Ventures; and Real Estate Related Investments. After acquisition, we engage in a variety of processes to improve and otherwise add value to the properties. We then determine the optimum method and timing of the disposition of those properties with the goal of maximizing our shareholders’ return on their investment.

Undeveloped Real Estate
Our primary focus will be to invest in undeveloped real estate assets that present “value-added” opportunities or other opportunistic investments for our shareholders. “Undeveloped real estate” means any real property that has (a) no development or construction in process on the land, (b) no development or construction is planned to commence within one year, and (c) produces no rental or other operating income.

Entitled & Developed Property
We may acquire other real estate assets, including, but not limited to, improved properties, particularly those in which there is a potential for a change in use, such as an industrial building changing to high density residential. In addition, this portfolio may also include real estate or real estate-related investments relating to properties in various other stages of development. These stages would include, without limitation, property to be redeveloped and repositioned, newly constructed properties and properties in the midst of lease-up or other stabilization, all of which will have limited or no relevant operating histories and no current income.

Joint Ventures
We may invest in limited partnerships, general partnerships and other joint venture arrangements with other real estate entities’ programs formed by, sponsored by or affiliated with Shopoff Advisors or an affiliate of Shopoff Advisors, if a majority of our Independent Directors who are not otherwise interested in the transaction approve the transaction as being fair and reasonable to us and our stockholders and on substantially the same terms and conditions as those received by the other joint ventures.

Real Estate Related
We may make real estate-related investments, either alone or jointly with another party, including investments in mortgages secured by real property or loans made to real estate companies secured by a pledge of securities.

Execute Vision & Add Value
We will undertake various functions to enhance the value of our land holdings, including land planning and design, obtaining required environmental approvals, and engineering and processing of tentative tract maps. All of these initial entitlements are discretionary actions as approved by the local governing jurisdictions. The subsequent entitlement process involves obtaining federal, state, or local biological and natural resource permits if applicable. Federal and state agencies may include the U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service, State Wildlife, or others as required. By obtaining these approvals or entitlements, the firm can remove impediments for development for future owners and developers of the projects. It is through this systematic process that we believe that we can realize profits for our investors by enhancing asset values of our real estate holdings.

Sell Property for Highest and Best Use at the Most Optimal Time
The investment committee of Shopoff Advisors will determine whether a particular property should be sold or otherwise disposed of after consideration of the relevant factors, including appreciation of the property and market conditions, with a view toward achieving our principal investment objectives, which are (1) to preserve, protect and return the investors’ capital contribution; (2) to realize growth in the market value of our properties upon our ultimate sale of such properties; and (3) to provide investors with the liquidity for their investments by listing the shares on a national securities exchange within ten years of the commencement of our offering, or, if our shares are not listed prior to that date, by commencing the liquidation of our assets and, following the satisfaction of our liabilities, distributing the remaining net proceeds as set forth in our prospectus under "Distributions.”

In general, we intend to hold properties, prior to sale, for a minimum of four years. When appropriate to minimize our tax liabilities, we may structure the sale of a property as a “like-kind exchange” under the federal income tax laws so that we may acquire qualifying like-kind replacement property meeting our investment objectives without recognizing taxable gain on the sale. Furthermore, our general policy will be to reinvest in additional properties using the proceeds from the sale, financing, refinancing or other disposition of our properties that represent our initial investment in such property or, secondarily, to use such proceeds for the maintenance or repair of existing properties' or to increase our reserves for such purposes. The objective of reinvesting such portion of the sale, financing and refinancing proceeds will be to increase the total value of real estate assets that we own to pay distributions to our shareholders.