Arixa Capital Introduces REIT Structure for Its Arixa Enhanced Income Fund, L.P.

Allows Investors to Capture as Much as a 20 Percent Deduction and Increases After-Tax Returns

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Apr 10, 2019, 07:15 ET

LOS ANGELES, April 10, 2019 /PRNewswire/ -- One of the Western Region's leading non-bank real estate lenders – Arixa Capital Advisors, LLC ("Arixa Capital," "Arixa" or the "Company") – has introduced a REIT structure for one of its lending funds, in order to allow investors to capture a tax deduction of as much as 20 percent, substantially improving after-tax returns. Prospective investors can learn more here: www.ArixaCapital.com/Arixa-Enhanced-Income-Fund/

"Our top priorities are to provide high rates of return for our investors through our core lending platform, while preserving their capital," said Jan Brzeski, Founder and Chief Investment Officer of Arixa Capital. "We recognized this meaningful opportunity to benefit our clients and acted quickly to put in place the right structure to take advantage of recently enacted tax legislation."

Late last year, in order to improve the after-tax returns for investors in its Arixa Enhanced Income Fund, L.P. (the "Fund") – an investment vehicle focused on providing current income and capital preservation – the Fund formed the Arixa Enhanced Income Fund Subsidiary, LLC, which will elect to be treated as a real estate investment trust ("REIT") for federal and state income tax purposes. This meaningful benefit to investors, made possible through the 2017 Tax Cuts and Jobs Act, allows non-corporate limited partners of the Fund to qualify for a deduction of up to 20 percent of the "qualified REIT dividends", thus reducing the overall effective federal tax rate on such income, from 37% to as low as 29.6%. Additionally, tax-exempt investors may now avoid the recognition of unrelated business taxable income ("UBTI") from distributions from the REIT subsidiary to the Fund.

About Arixa Capital:

Established in 2006 and based in Los Angeles, Arixa Capital specializes in private lending secured by real estate and has directly originated more than $1 billion in loans. Arixa provides real estate exposure to its clients through a full-service lending platform to source, underwrite, monitor and service underlying investments. Arixa strives to provide attractive current income and total returns, while remaining focused on capital preservation by maintaining a healthy margin of safety on every investment. The firm makes investments directly, without relying on multiple layers of managers who would add layers of fees for investors.

Approximately 90% of Arixa's loan origination is through repeat borrower relationship referrals. Arixa's borrowers value speed and certainty of execution and are willing to pay a higher rate than banks might charge. Arixa's streamlined process vs. banks allows for attractive returns for the Company's fund investors. Arixa's vertical integration enables the Company to deliver real value to investors and outperform the returns of competitors pursuing similar strategies. Over time, Arixa has provided investors with:

A steady source of income in a liquid structure,
Strong performance relative to other liquid real estate, fixed income and income-producing strategies, and
Risk reduction through senior, first-lien positions for the large majority of loans

Arixa is 100% employee-owned, without the conflicts that may exist within larger firms with outside ownership, allowing the Company to focus entirely on generating strong risk-adjusted returns for its investors. www.ArixaCapital.com

Contact Information:
For more information, please contact Dan Frankel, Director of Investor Relations and Business Development, at [email protected] and (310) 424-1260.

SOURCE Arixa Capital Advisors, LLC