GOOD INVESTMENTS + GOOD JOBS
In many cases, the investment by pension funds in local projects can create both
above average investment returns and union jobs that might not exist but for the
investments. Acting as the QPAM and investment manager for groups of local
trade union pension funds (and related funds), WhiteStar Advisors, LLC has been
successful in creating pooled investments and making construction related loans
on projects totaling almost $750 million, employing that money in the local
geographic area of the participating funds. It only makes sense, where the
investments can be structured to be prudent and ERISA compliant, to leverage the
investment of your assets to benefit the local union construction environment.
WhiteStar Advisors, LLC (“WhiteStar”) has successfully designed a number of
these types of local pooled programs, as illustrated below.
Hyatt Regency Hotel Mezzanine Loan, Bloomington, Minnesota
• $34 million mezzanine loan, originated, underwritten and serviced by
WhiteStar Advisors, LLC, for the construction of a 303-room full-service hotel
located near the Mall of America and the Minneapolis airport.
• Borrower has notified WhiteStar of its intent to sell the property and pay the
loan approximately two years prior to its stated maturity.
• The expected internal rate of return, on an unleveraged basis, is
Condominium First Mortgage Construction Loan, Tribeca, Manhattan
$60.6 million first mortgage loan, originated, underwritten and serviced by WhiteStar Advisors, LLC, for the construction of an 18-unit residential condominium in the Tribeca area of Manhattan.
The project was completed and sold out in 2016.
The internal rate of return, on an unleveraged basis, was 10.70%.
Condominium First Mortgage Construction Loan, East Broadway, Manhattan
$16.8 million first mortgage loan, originated, underwritten and serviced by WhiteStar Advisors, LLC, for the construction of a 10-unit residential condominium located at 201-203 East Broadway, Manhattan, New York.
The project currently is under construction and sales are expected to commence in the fall of 2017.
The internal rate of return, on an unleveraged basis, is expected to be approximately 10.70%.
Senior Living Facility, Minneapolis, Minnesota
$4.5 million subordinated loan originated, underwritten and serviced by WhiteStar Advisors, LLC, for the construction of a 98-unit senior living facility developed by a major regional senior living operator from Minneapolis.
Construction has been completed and the facility is operating at approximately 94% occupancy.
The internal rate of return, on an unleveraged basis, is expected to by approximately 11.57%.
Half Moon Bay, California, Golf Course Second Mortgage
$8.04 million second deed of trust (second mortgage) on a premier 36-hole ocean-front golf course, pro shop, restaurant and wedding banquet operation, located in the heart of Silicon Valley in Half Moon Bay, California, approximately 20 miles south of San Francisco (California’s fourth largest city) and approximately 40 miles northeast from San Jose (California’s third largest city). The loan was originated, underwritten and is being serviced by WhiteStar Advisors, LLC.
The project is regularly ranked among the top public play golf courses in the country.
The internal rate of return, on an unleveraged basis, is approximately 10.70%.
The QPAM Advantage
Trustees of pension plans that are governed by ERISA should make certain that their
real estate managers are qualified as a Qualified Professional Asset Manager
(“QPAM”) for several reasons:
hiring a QPAM can ensure that the trustees do not inadvertently violate ERISA’s stringent party-in-interest prohibited transaction guidelines,
the use of an investment manager who is also a QPAM allows the pension plan to engage in certain transactions that may otherwise be prohibited under ERISA,
many errors and omissions insurance policies which protect trustees of pension plans from fiduciary liability require, as a condition for coverage,that all real estate transactions be negotiated, overseen, and passed upon by an investment manager who qualifies as a QPAM.
WhiteStar utilizes both the expertise of both its own staff and third-party
professionals as necessary (market study consultants, appraisers, environmental,
survey, legal) during the due diligence process.
Types of Projects
Residential – rental and condo
Commercial – retail, office
Industrial – warehouse, pipelines, transportation facilities, ports
Types of Investments
Senior mortgage loans
Second mortgage loans
Subordinated (mezzanine) loans
Convertible preferred equity
Expected returns range between 8% for senior loans to 10.5% to over 13% for
mezzanine loans and equity.
Focus in headquarters city when opportunities available
Investment Management Agreements allow for wider geography for diversification purposes
While investment decisions are made based on the suitability of a project as a
pension fund investment and return standpoint, WhiteStar only invests in projects
built with union labor for its union pension fund clients.
James (Jim) Bishop – With over 40 years of real estate investing and lending
experience, Jim is President and CEO of WhiteStar Holdings, LLC, and a co-founder
and Managing Director of WhiteStar Advisors, LLC, one of the country’s largest SEC
registered investment advisors specializing in direct real estate investments for
multi-employer pension funds. Prior to the founding of WhiteStar, Jim served as a
senior officer at a major New York investment banking firm, where he was
responsible for the financing and development of real estate, energy and
Jim earned a degree in finance (secondary emphasis in economics and accounting)
from Georgia State University, and a Juris Doctorate from Concord University
School of Law, and holds a Florida real estate broker’s license. He is a member of
the American Bar Association and a member of its sections on Real Estate and
John Lundsten – Co-founder and Managing Director of WhiteStar Advisors. Prior to
WhiteStar, John served as an officer of such firms as Tishman Realty, Ogden
Development, Koll Management Services and Karsten Institutional Realty Advisors.
John has been involved with large-scale, commercial real estate and hospitality
projects focusing on asset management and construction projects for institutional
investors, as project manager, investment officer, asset manager and managing
principal. He also served for six years as a founding director and committee chair
of the Pension Real Estate Association ("PREA").
John received undergraduate and Master's degrees from the University of Illinois
at Urbana / Champaign, majoring in Biology and Educational Psychology and has
served in a variety of commercial real estate management roles, and as a fiduciary
for more than forty years.
Dan O’Donnell – Co-founder and Managing Director of WhiteStar Advisors. Prior to
WhiteStar, Dan served as Controller of CRD Campbell, Inc., an architectural /
engineering firm in St. Louis. He moved to South Florida in 1997 as Controller of
Xplanation Corporation. In 1999, he moved into the real estate development and
management as an accountant and assistant to the Controller of Altman
He received a Bachelor's Degree in Business Administration from the University of
Evansville, in Indiana.
Joseph (Joe) Arndt – Senior Vice President and Controller of WhiteStar Advisors,
LLC. Joe has over 20 years’ experience in performing accounting and auditing for a
variety of companies, and clients. In addition to real estate, he has experience in
financial services, insurance, healthcare, non-profit, distribution and
Joe earned a Bachelor of Science in accounting from the University of Detroit
WhiteStar to make presentation to pension fund board and, as applicable, its investment consultant
WhiteStar to submit proposal to act as the pension fund’s QPAM with respect to this program
Enter into Investment Management Agreement
Meet with local developers, brokers and commercial lenders, in addition to participating funds, to identify profitable investment opportunities For further information please contact Jim Bishop at 561-999-9949, or by email.