Nancy Pelosi’s Husband Betting Big on San Francisco Office Real Estate, Coming Back?

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In recent months, real estate offices in San Francisco have been struggling. It led the country with a 37% vacancy rate in the second quarter of 2024, but one celebrity investor thinks now is the time to strike.

Portfolio financial disclosures by politician Nancy Pelosi and her husband Paul revealed that Paul Pelosi invested between $250,000 and $500,000 in REOF XXVI, LLC, an entity responsible for the purchase and management of a commercial office property at 631 Howard St., in the south of the city. The market or SoMa area of ​​San Francisco. The investment took place on August 13 and was reported on September 11.

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The five-story Class B office building was purchased for $36.4 million by a partnership between business owner Greg Flynn and real estate firm Ellis Partners. That was about 42 percent less than what Invesco paid for the property in 2014. The five-story building was built in 1929. “Our base bet is that the market will improve significantly over the next five to 10 years.” , Flynn said at the time of the purchase.

The San Francisco Standard also reported in earlier disclosures that Pelosis has invested in several other Flynn entities, including REOF XX LLC, which has invested in hotels around the United States, and REOF XXV, which is updating and restoring a luxury hotel in San Francisco. Flynn and a group of investors bought the Huntington Hotel on Nob Hill from foreclosure in March 2023. The hotel had closed during the pandemic and had a $56.2 million loan.

The Pelosises have several homes in the San Francisco area. This could be seen as a rich local investment in the city he lives in and represents, but it also points to the power of real estate to expand and increase net worth. Pelosi’s stock market trades have been closely watched. It has invested in Nvidia, Broadcom and other high-profile tech stocks. Several ETFs are dedicated to tracking her movements and tracking her investment style. Paul Pelosi is a venture capitalist who understands the risks and rewards of investing in different types of assets.

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Many family offices and ultra-high net worth individuals have these investments in their portfolios for various reasons. Investing in commercial real estate assets not only provides diversification from stocks and bonds, but can also come with tax breaks. For projects like the Huntington Hotel, which is undergoing redevelopment and not generating cash flow, the Pelosis can use any potential temporary losses to offset capital gains taxes on other parts of their portfolio.

You don’t have to have Pelosi’s level of wealth to invest in these types of opportunities. One company that is a leader in the real estate investment space is EquityMultiple. EquityMultiple offers individual real estate investments such as an industrial facility near Orlando, FL and commercial real estate asset-backed funds. EquityMultiple’s Ascent Income fund targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a core investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000.

The fact that the Pelosis are making these types of investments in the San Francisco market indicates several things. The first is that right now there are substantial opportunities for investors with ready cash in the market. The second is the value of patience. As long-term investors, even though they are in their 80s, the Pelosis see real estate value as a way to potentially earn significant returns by investing in San Francisco’s rebound potential.

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