Fitzpatricks Hotel Chicago Property Pension

Hi,

Has anybody seen this property pension deal based on the Fitzpatrick Hotel Chicago. It is being promoted by [broken link removed]
Seems an interesting concept.

Rujib

I heard about it on the radio because there's another company doing it also. I also was quite interested but would be interested to see how they calculate the estimated return. Also interested to know what you do if you want to sell it on and what is the potential for capital appreciation on the room. Do you get any additional information? I'm going to follow up on it to-morrow.

By the way, this can also be used as part of a pension plan which is interesting also (however, you will require about 100k in your pension).

One always wonders why the yanks have not them all bought.
Yes on first glance looks positive.
Wonder is it a pooled rent job?

Yep it's pooled.

Without getting into the specifics of the particular offering, people should always be aware that if they are transferring from, say, a Managed Pension Fund into a geared single property arrangement, they are reducing their diversification enormously. The average Managed Pension Fund contains hundreds of separate assets across many markets and generally doesn't borrow. So the effect on the fund of the collapse of the value of one asset will be limited to the fund's exposure to that asset. Transferring from such a fund into a fund which owns just one or two assets is massively increasing the potential risk. If it's geared the risk (and, to be fair, the potential return) is multiplied.

I'm not saying this is necessarily a bad thing. Higher-risk investments can work out excellently.

But people should be well aware of the risk factors.

Liam D Ferguson
www.ferga.com