Full First National Realty Partners Review
First National Realty Partners is an alternative investment platform that offers a unique spin on investment in retail commercial property. Each institutional-quality offering features a retail space (i.e. a mini-mall) anchored by a nationally-recognized brand, like ShopRite, Walmart, Dollar Tree, and Aldi.
In addition, each property is valued below replacement cost. This allows First National Realty Partners to create exit strategies that involve a sale or refinance in a 3 to 5-year period. As a result, investors receive both quarterly cash flow and capital appreciation.
As an alternative, investors may participate in a real estate fund instead. The Opportunity Fund has a $50K minimum investment and provides for guaranteed placement in First National Realty Partners’ offerings.
Are You Accredited?
Like many other real estate investment companies, FNRP holds all prospective investors to a high standard. While some companies—such as Fundrise—have opportunities for both the accredited and non-accredited investor, this is not the case with FNRP. In fact, the everyday investor likely won’t meet the company’s high investment criteria.
By default, everyone is considered to be a non-accredited investor. In order to be considered an accredited investor status, you must meet a certain investment criteria. Fortunately, there are a few different ways to reach this investor status.
- Be a high-net-worth investor with a net value exceeding $1m. It’s important to note that the value of your primary residence can not be considered when calculating your net worth.
- Have an annual income exceeding $200k (for individual accounts).
- Have an annual income exceeding $300k (for joint accounts).
You don’t need to meet each requirement to be considered an accredited investor. Simply achieving one investment minimum requirement is enough to reach this investor status.
While reaching accredited investor status without being considered a high-net-worth investor is possible, it’s a bit more challenging to achieve. To meet one of the annual income requirements, your income must have met or exceeded these requirements for the past two years. You must also be able to reasonably anticipate a similar income for the current year.
Unfortunately, you can’t invest in FNRP if you aren’t an accredited investor (even if you can afford the minimum investment required!). If that’s the case, your best bet is to consider alternative investments instead.
First National Realty Partners At A Glance
Fees: $50,000 minimum investment per deal. .5% to 1.5% Asset Management Fee, determined on a per-deal basis. Other fees may apply.
Minimum Balance: $50,000 for the Opportunity Fund
Minimum Investment: $50,000
Account Fees: Determined on a per-deal basis
Redemption Options: Non-liquid. Investors
Customer Support: Direct phone support with a team of investment specialists, M-F 9am to 5pm EST
Transparency: Comprehensive due diligence packet on each offering is available directly through their website.
What Is First National Realty Partners?
First National Realty Partners is one of the fastest-growing commercial real estate private equity firms in the country. Its mission is to provide accredited investors with the top .1% of value-add commercial properties with nationally-recognized anchor tenants in both primary and secondary markets across the country.
Each institutional-quality investment opportunity is thoroughly vetted by their in-house team for its potential to provide both cash flow and capital appreciation. Appreciation is created either through renovations to the property, providing new upper-tier tenants, or negotiating long-term lease deals with anchor tenants.
Investors participate as limited partners in individual property offerings that are featured on First National Realty Partners’ comprehensive and easy-to-navigate website. Because of this format, partners receive a K-1 for their taxes, which means they also receive a tax deduction for the depreciation of the property.
Click for First National Realty Partners pricing and details.
How First National Realty Partners Started
Based in Red Bank, New Jersey, First National Realty Partners was co-founded by Anthony Grosso and Christopher Palermo in 2015. Jared Feldman, the firm’s Chief Investment Officer, deployed more than $100M in equity capital during his years of consultancy before joining the firm.
Since 2015, First National Realty Partners has grown to 1,445 investors, holding over $914M in commercial assets, and averaging a historical 12% to 18% return.
First National Realty Partners is not a REIT. You do not purchase shares in a portfolio of investments. Rather, their model is to offer fractional investment in individual retail commercial properties, anchored by a nationally-recognized tenant.
Better still, First National Realty Partners has carved out a niche by finding only under-valued assets, or assets with large upside potential. This allows them to offer investors both passive quarterly income and capital appreciation.
The Property Selection Process
Although First National Realty Partners invests in a few different types of properties, they primarily focus on real estate space that’s being occupied by national brands. Nationwide brands are some of FNRP’s largest tenants. By renting to these tenants, the company severely reduces the risk of rent going unpaid.
Every property is thoroughly vetted by FNRP’s in-house investment opportunities to ensure viable growth opportunities. The company has said that it invests in one out of every thousand properties it considers. If these claims are true, then it’s fair to say that each property selected should be highly-profitable.
First National Realty Partners Investment Options
First National Realty Partners provides co-investment as a limited partner in one of their retail commercial property offerings. These properties are anchored by a large, nationally-known store, such as Win-Dixie, Wal-Mart, or Kohls, and also has upside potential through appreciation or renovation.
FNRP also offers an Opportunity Fund. For $50,000, the fund provides investors guaranteed placement in one of the First National Realty Partners’ offerings.
First National Realty Partners Pricing
Participation in a limited partnership is priced on a per-deal basis and is offered to accredited investors only. To see offerings and obtain information on pricing, visit First National Realty Partners’ website.
The Investment Process
FNRP makes it easy to take advantage of the best investment deals, offering a streamlined process for real estate investing. The company takes a standardized approach to investments, ensuring that every investment offering has been thoroughly vetted. Once an offering has passed the in-house investment process, it’s available for viewing.
You can easily find a term investment—both longer and shorter—by browsing through the offerings on the First National Realty Partners website. The company offers a variety of investment opportunities, including grocery-based chains, necessity-based retail space, and other commercial offerings from national brands. Every property offered has been selected because of its anticipated superior risk-adjusted returns.
Their “Property Search” page allows potential investors to view FNRP’s current properties. These property listings contain a wide selection of property data, including:
- Site plans
- Property contacts
- And more
Once you’ve found a property you’re interested in, you can watch a LIVE deal webinar on the property. This will explain all the details of the investment throughout the entire investment lifecycle, including the anticipated rate of return, anticipated annual income, and annual cash distributions. You’ll need to wait for one quarter to pass before you can start enjoying a consistent cash flow.
The entire process is completed online, where you’ll be provided with the necessary investment documents and details concerning your investment. You can also reach out to customer service by phone, although no specific customer service hours are provided on their website.
How to Fund Your FNRP Account
There are a few different ways to fund your account. Current options include:
- Wire transfer
- IRA (with your self-directed IRA custodian), or
- 1031 exchange
You can expect to pay an annual asset management fee of 0.5% to 1.5% on each property. However, there isn’t a consistent fee structure across all offerings; you’ll want to check the specifics of your investment documents before making the commitment. There are three other fees you may end up paying:
- Acquisition fee
- Disposition fee, or
- Property management fee
How Long Until I Start Seeing Returns?
FNRP has historically been very successful, so you can reasonably expect a consistent cash flow throughout the duration of your investment. You’ll start receiving quarterly cash distributions one quarter after your deal is closed.
However, it’s important to remember that any investment made through FNRP is an illiquid investment. The company manages the property from x, but you—as the investor—can’t exit the deal until FNRP sells the property. Generally speaking, the company holds properties for five to seven years.
Returns vary from property to property, but First National Realty Partners generally targets average annual returns of 12%-18% per property. Results vary though: while some properties have underperformed, others have reached internal rates exceeding 45%! Annual cash distributions average between 5% and 9%.
Every real estate deal is different, but FNRP targets average annual cash distributions of 5% to 9%.
First National Realty Partners Portfolios
Currently, First National Realty Partners maintains over $900M is commercial property assets. To see previous deals and access current offerings, sign up on First National Realty Partners’ website.
The most common way to take advantage of FNRP’s various real estate opportunities is by investing in individual offerings. Their current opportunities include both necessity-based retail space and grocery-anchored retail properties and other types of commercial real estate. These real estate deals use contract renewals, rental income, and other methods to provide investors with quarterly cash distributions. You may also benefit from property appreciation (in addition to quarterly distributions).
Investors can also choose to invest in the Opportunity Fund. This fund allows them to instantly invest in multiple retail shopping centers (and other types of commercial real estate) with a single investment rather than having to invest individually. The minimum investment required for the Opportunity Fund is $50,000.
Like the individual offerings, the Opportunity Fund allows investors to enjoy quarterly cash distributions from rental income, property appreciation, and other methods. This real estate investing strategy targets an annual return of 12%-18%, with targeted annual cash distributions averaging right around 8%.
First National Realty Partners Performance
FNRP provides both quarterly cash flow and capital appreciation. Each investment targets a 12% to 18+% IRR, with a 8% targeted average annual cash distribution. Individual results vary.
Strengths, Weaknesses, and Exciting Possibilities
By focusing on under-valued properties with high-quality anchor tenants, First National Realty Partners can create some exciting advantages for their limited partners.
For example, in a recent investment, First National Realty Partners acquired a property, then re-negotiated a 5-year lease with CVS. This allowed First National Realty Partners to refinance the property within two years of acquisition and pay back the initial investment of the partners.
The net result? Partners could reinvest in a second opportunity with their initial capital, while still enjoying cash flow from their first investment.
On the potential downside, the investments offer no liquidity and no diversity. You invest in a single property offering along with numerous other limited partners, then ride the investment out to its eventual conclusion. Though the returns are extremely attractive, this is not an investment for someone seeking the diversity or liquidity of a REIT.
First National Realty Partners has found an excellent niche in the commercial real estate investment space, allowing accredited investors to participate in the kinds of deals normally reserved for institutional investors.
The website makes it easy to understand each property offering, and perform due diligence with a few mouse clicks. The partners at FNRP really know how to take complicated transactions and distill them into simple terms.
We also like the hands-on approach this alternative investment platform takes. All potential investments must make it through a rigorous investment criteria. Once the property is acquired, that’s when the real work begins. The FNRP team focuses on renovations, negotiating leases with current tenants, and bringing new, established tenants into the properties. This creates greater appreciation.
Though it does not provide the immediate diversity and liquidity of a REIT, an investor can find diversification with First National Realty Partners through investing in multiple properties. The offerings are not only scattered across the U.S., but by investing in properties with different anchor tenants, there’s little or no correlation between performance with each investment.
Click for First National Realty Partners pricing and details.
First National Realty Partners offers the top .1% of all retail-based, commercial institutional-quality investment opportunities you can find without being an institutional investor yourself. We would have liked to see more disclosure about the fees upfront to make it a little more convenient for research, but the offerings, the platform, the customer service, and especially the returns are all top of the line.
Check the First National Realty Partners website for a comprehensive list of FAQs