For attorney and investor Louis Rogers, wrapping up $100 million in real estate investment transactions in the past year was not that big a deal. It’s his weekend hobby, competing in equestrian eventing, that really gets his heart rate up.
“At the events, I think about how easy it is at work, where I’ve got all the answers in the world and never lose any sleep. In eventing, I’ve got to ride 25 miles per hour over bridges and ditches and all sorts of scary jumps and things and I start to think, ‘Oh, it’s so hard!’ It makes me want to pull my hair out,” said Rogers, a veteran of the real estate syndication market who spent three years as president of Triple Net Properties, a company he helped launch as outside legal counsel.
He left that role in 2007 and returned home to Richmond, Va., where his wife, Paula, and two daughters had set up the perfect training facility for equestrian sports of all kinds. Rogers had no idea how to ride a horse, but he was determined to dedicate more time to his family and his own well-being. Within a week, he was working with a show jumping trainer and is aiming to make the next national championships.
His passion for delivering a detailed, accurate and studied performance bridges both Rogers’ real estate career and his competitions on horseback. Early in his career, he became an expert in 1031 exchanges, helping to establish many of the industry’s best practices. Along with colleagues, he was a founding member of the Tenant-in-Common Association, now known as the Real Estate Investment Securities Association. In 2012, he decided to jump back into the business of holding real estate for qualified investors and founded Capital Square Realty Advisors, which sponsors 1031 exchanges as a Delaware Statutory Trust. The focus of the firm is on high-value properties with quality, long-term commercial tenants, though Rogers and his team quickly expanded their approach to be open to strong-performing investments in the multi-family and retail sectors, as well.
Investors are turning to real estate as a place where they can find safe investments with dependable returns, Rogers noted. The immediate support for Capital Square’s services exceeded even his expectations. But with an emphasis on transparency, personal relationships and running a frugal shop, the new firm has found eager partners. The overarching trend of Baby Boomers heading into retirement and looking for secure places to invest, as well as lingering fears over market volatility, has created a strong buy-in for the type of investment product Rogers and his company offer.
“Clients are now seeking preservation of principal: ‘Don’t lose my money. And while you are at it, I need to make a nice return.’ Back in the day, the first question people would ask was: ‘What’s my return?’ Now it’s: ‘How protected is my investment?’ ”
CPE: What’s the focus of Capital Square Realty Advisors?
Rogers: Capital Square was formed late in 2012 to serve as a sponsor of 1031 exchange replacement properties using the Delaware Statutory Trust vehicle to permit high-net-worth investors to acquire an interest in property qualifying for exchange treatment under Section 1031 (of the Internal Revenue Service Code).
The management team at Capital Square (which also includes Yogi Singh—Acquisitions, Pushkall Basaravaj—Financing, Stewart Garland—Property Management, Julia Bard—Office Manager/Paralegal, and Kim Watts—Investor Services), consulting with a number of leading broker-dealers who sell DSTs, concluded that Capital Square would focus on providing institutional-quality DST investments, with emphasis on (i) single credit-tenanted, mission-critical properties leased on a long-term triple-net basis to investment-grade tenants, (ii) quality multi-family properties and (iii) certain retail properties. Capital Square is on its fifth DST offering this year and anticipates approximately $100 million of acquisitions in its first year. Capital Square emphasizes quality properties with a lower fee structure for investors.
We concluded that a new company would better serve the broker-dealers who sell DST interests to high-net-worth investors. Many of the older sponsors have legacy issues from non-performing properties and debt issues that may impact their future performance.
CPE: Tell us about your experience at Triple Net Properties.
Rogers: Triple Net Properties of Orange County, Calif., was my first major sponsor client, formed in 1998 as a Virginia LLC, and most of their offerings used LLCs as the title holding vehicle for real estate syndications. Triple Net was on the cutting edge in structuring undivided real estate ownership (tenants-in-common or TICs) for high-net-worth investors seeking tax deferral under Section 1031. As Triple Net counsel, I helped to craft the key tax and real estate documents that became standards in the TIC industry and were essentially adopted by the IRS in Revenue Procedure 2002-22, which validated the structure created for Triple Net’s TIC syndications. Numerous REITs and scores of real estate funds followed for dozens of real estate sponsors before I became president of Triple Net in 2004. All told, I formed thousands of LLCs, structured several billions of dollars of 1031 exchanges, assisted with the acquisition of over $5 billion of real estate and helped grow what became the largest sponsor of private real estate programs. In 2007, I returned to my Virginia home and concentrated on lending, investment banking for real estate and providing specialized legal services.
CPE: How do you strive to differentiate your current business?
Rogers: Capital Square management is hands-on in all aspects of the business. We work closely together in the home office and are all on the same page. The managers own Capital Square debt-free, without distraction from outside investors or lenders.
CPE: What’s one challenge that you’ve overcome on your path to success?
Rogers: Balance. I have learned to carve out time each day for recreational and family activities.
CPE: Describe yourself in five words.
Rogers: Driven, focused, aggressive, fun-loving and forgiving.
CPE: Looking back, what’s one piece of advice that you would have given yourself in the beginning of your career?
Rogers: Don’t worry so much; with hard work and application of practical intelligence, it will all work out.
CPE: Name one of your greatest inspirations in life.
Rogers: My dad, Al Rogers, DVM, the son of poor immigrants who worked his way through veterinary school to provide loving care for large and small animals in Smithfield, Va. Dad worked diligently to improve race relations in southern Virginia and to make his town, state and nation a better place for all people, regardless of race, creed, color or size of bank account.
CPE: What’s next for you and your company?
Rogers: Becoming the second-largest DST sponsor in the nation in our first full year of operations. Capital Square aims to lead the DST industry with best practices.
CPE: When you’re not traveling for business, what’s your ideal destination or your favorite way to pass your time?
Rogers: Eventing—an equestrian sport derived from the cavalry, where you perform controlled riding called “dressage,” participate in precise stadium jumping and run at breakneck speed through hill and dale in cross-country jumping. I am being trained by four-star rider Laine Ashker. We participate in eventing competitions across the country; just this month, Millbrook Horse Trials in Upstate New York and Richland Park Horse Trials in Western Michigan. After a busy calendar of events in the Carolinas and Maryland during the fall, the horses ship to Ocala, Fla., for the winter because the ground freezes in Virginia. Numerous events are held during the winter within a short drive of Ocala. Early in the spring, around the time of the Rolex Kentucky Three-Day Event in Lexington, Ky., the horses ship back home to Richmond, Va., for the spring through fall season.
I am fortunate to live on a working horse farm with Paula, my spouse of over 30 years, and to keep our horses at home. I have a 100-yard commute to the barn, making an easy transition from work to the barn for training. Keep your fingers crossed for me as I seek to “move up” on a fabulous new horse, Tipperary Liadhnam, or “Paddy,” a gorgeous, talented and opinionated Irish Sport Horse who we found in London last year after the Olympics.