Real Estate Investment Fund Private Placements: Structuring Securities Offerings After the JOBS Act

Leveraging New Solicitation and Advertising Avenues and Navigating Stricter Rule 506 Safe Harbor Provisions

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, July 17, 2014

Recorded event now available

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Course Materials

This CLE course will provide real estate finance counsel and advisors with a review of the impact of the SEC changes to Regulation D and Rule 506 on real estate investment funds, discuss new opportunities for advertisement for private placements of real estate investments, and address "bad actor" provisions and the proposed changes to private placement provisions to increase investor protection.

Description

The SEC’s significant changes to the private placement provisions in Regulation D are transforming the real estate investment fund market. Real estate sponsors may now advertise private securities offerings to the general public via the Internet and mainstream media.

The lifting of the ban on general solicitation was not without controversy as many worried that it exposes unsophisticated investors to unscrupulous issuers. The SEC rules do provide investor protections that prevent issuers from using Rule 506 where the issuer or certain related parties qualify as “bad actors.”  Sales of securities from “new” Rule 506 may only be made to accredited investors and the burden on issuers to verify accredited investor status has been enhanced.

One potential pitfall for issuers is the broker-dealer requirements in the Exchange Act. Issuers must carefully consider the need to register as a broker or dealer or whether they can meet the safe harbor exemption from registration.

Listen as our experienced panel discusses the significant changes to the private placement provisions approved by the SEC allowing for advertised private placements, the new "bad actor" provisions under Rule 506, and the impact of the general solicitation rules on the real estate investment fund market.

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Outline

  1. Advertised private placements
    1. New opportunities
    2. How the issuer verifies that all investors are accredited
  2. "Bad actor" provisions
    1. Events that will disqualify an issuer from using Rule 506
    2. Effect of previous disqualifying events
    3. The waiver process
  3. Broker-dealer implications

Benefits

The panel will review these and other key questions:

  • What are the new opportunities for advertised private placements for real estate investment funds?
  • How does the issuer verify that all investors are accredited, as required by the new provisions?
  • What events will disqualify an issuer from using Rule 506?
  • What is the effect of previous disqualifying events?
  • What is the waiver process?

Faculty

Mark Stapp
Mark Stapp
Director, Master of Real Estate Development
W.P. Carey School of Business, Arizona State University

As an active member of the Phoenix development community, Professor Stapp is currently on the board of the Local...  |  Read More

Thompson, David I.
David I. Thompson
Member
Dickinson Wright

Mr. Thompson's practice encompasses corporate, transactional, and business matters, with particular emphasis on...  |  Read More

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