William Shopoff, chief executive of Irvine-based real estate investment company Shopoff Group, made a splash earlier this year by selling his Emerald Bay home in Laguna Beach for a near-record price.
That’s not likely to be the only big deal Shopoff makes this year.
The longtime real estate executive this month closed on a minimum of stock sales for Shopoff Properties Trust Inc., a real estate investment trust created to buy property,primarily raw land for housing developments.
The goal is to buy $75 million to $100 million of undeveloped land during the next year or so, and as much as $600 million during the next two and a half years.
“It all depends on whether the sellers want to cooperate,” Shopoff said.
The fund, first formed in late 2006, is designed to raise as much as $200 million from investors and pass along most profits to shareholders.
While the Shopoff Group’s primary investors are wealthy individuals, the fund is targeting investors of more moderate means, the company said.
So far, about $17 million has been raised.
Shopoff said it took a little longer than expected to raise the minimum amount of subscriptions for the fund.
The delay could end up benefiting the fund as the housing land market has seen price declines greater than first expected, he said.
The bottom of the market still is a way off, according to Shopoff, who estimates housing will bottom out by the end of next year.
The fund intends to buy land, including foreclosed properties, from homebuilders, developers and lenders. Shopoff Properties Trust said it’s sourcing most of its deals through banks or individual homebuilders who are seeking relief from debt, slowdown of development and the recession in the real estate market.
Along with California, Shopoff Properties Trust is looking for deals in Nevada, Arizona, Texas and Hawaii. The company’s intention is to hold on to its assets for five to six years.
A few deals in Riverside County are said to be in escrow. The fund also could directly acquire some of the properties around Lake Elsinore that are already owned by Shopoff Group.
Earlier this month, Shopoff was said to be looking to buy some local assets owned by Irvine-based SunCal Cos. and its now-bankrupt financial partner, Lehman Brothers Holdings Inc.
“There are plenty of opportunities (to buy),” he said. “But just because a property’s cheap doesn’t mean it’s good.”
Recent sales by Shopoff have proven to be good deals. Eight investment programs overseen by the Shopoff Group sold about $107 million worth of properties, which had been held on average about five years, from 2005 to 2007.
Those programs earned close to $81 million in profits for investors, at a 62% annualized sales profit rate, according to regulatory filings.
Personal Sale
Shopoff also timed his own home-buying well.
In February, Shopoff sold his beachfront home at Emerald Bay for $34.5 million, making it the second-most expensive home sale ever reported here. The buyer was reported to be Louis Welch, president of Irvine-based LA Fitness International LLC.
Records show Shopoff paid $22.5 million for home in late 2005.
Shopoff still is living in Laguna Beach, paying “substantially less” for another home that better suits his family, he said.
