Director of Corporate Development Travis Okamoto joined Caliber CEO Chris Loeffler again this month to discuss a broad range of topics as 2020 winds down and sights are set on 2021.
Retrospect on 2020
“I’m certainly looking forward to closing 2020, and I know all of our investors are, too,” Loeffler starts. “What have we learned so far? We’ve learned that global pandemics are pretty unpredictable.”
But despite the challenging environment, Loeffler says he is proud of his team for remaining strong, composed and professional, which is what investors and customers expect.
“Because every time we think we have something figured out, they shut down another part of the government, or whatever the case may be,” he says, citing Caliber’s ability to adapt to the multitude of situations that have faced the company the past nine months.
Maintaining a balanced approach of continuing to protect the existing assets remains Caliber’s first priority, Loeffler says. “But also looking at the opportunities in front of us now that there is a vaccine,” he continues, admitting he’s not sure how long it will take for life to return to pre-pandemic levels. “But we know that it has an end.”
The company has been busy preparing Q3 updates and reporting documents for the investment funds, which will be uploaded to the client portal when available. Hotel performance remains off compared to 2019, while other assets like multi-family, opportunity zones and the Johnstown project remain in good shape.
Online Public Offering Update
COVID-19 also has impacted the closing date of Caliber’s Reg A online public offering, which is now Feb. 26, 2021. To date, the company has raised about $3.3 million, but is making adjustments to the online presentation and adding content for a refreshed rollout in January.
“Most Reg A capital raises, the companies raise about 60 to 70 percent of the money they’re going to raise in the last 30 days of the race,” Loeffler says. “So, we should be targeting an $8 million to $10 million round, which still puts money in the company and continues to allow us to grow Caliber the way we want to own it.”
New Fund Alert
Single- and multi-family valuations and rental income also have prompted Caliber to consider making adjustments to its Caliber Residential Advantaged Fund with investor approval. The company proposes a new, renamed fund called the Caliber Core Plus Income Fund, which expands the fund’s ability to invest in other stabilized income-producing real estate assets beyond single-family properties. Additional details are coming in early 2021.
“We got to a point in time when we realized we’re selling multi-family projects in other projects that we’ve bought, turned around and stabilized, that are producing significantly better cash flow returns to those future investors,” Loeffler says. “You are going to get regular rents and a portion of the appreciation, so you still have some growth involved in your investment.”
“I think this fund is a really great place to take a look,” he says.
Other CEO Call Highlights:
- The company has prepared for several reporting deadlines approaching after Dec. 31.
- Valuations for Q3 reports are completed for most funds, which will help for annual report preparation.
- Annual statements for clients are being prepared, including 1099s and other documents, and will be uploaded to the client portal.
- The IRS has extended filing deadlines, so there is still time to reinvest capital gains into opportunity zone investments, or even refile 2019 to realize capital gains. Contact your CPA to inquire.
The next CEO Call is scheduled for Thursday, Jan. 21, 2021.