After investing significant time and almost $1 million, Wander has successfully established the first known vacation property Real Estate Investment Trust (REIT), known as Wander REIT. Today Wander REIT comprises five properties from Wander’s portfolio. It is a private REIT accessible to accredited and institutional investors under the SEC’s Reg D. The website states that Wander REIT currently holds a Total Asset Value of $14.5 million, representing the combined value of the properties, and aims to offer an 8% annual dividend (the first dividend payments have now been made).
Per the company, the Wander REIT is the first and only diversified vacation rental REIT in the market. It is the only way to invest in a portfolio of professionally-managed short-term rentals and access short-term rentals (STR) – the fastest growing segment in real estate – without the hassle of buying and managing properties yourself. Wander REIT therefore aims to offer investors ownership in a portfolio of homes operated by Wander. The process involves raising capital from investors to acquire properties, leasing those properties to Wander under a Master Lease Agreement, and having Wander manage them. Wander pays monthly rent to the REIT based on a fixed payment and a percentage of revenue from the properties. The REIT then distributes quarterly dividends to investors, targeting an 8% annual dividend. The value of Wander REIT shares is determined by the monthly valuation of the property portfolio.
From Wander’s perspective, Wander REIT serves as a means to expand its portfolio efficiently and retain full control over the guest experience necessary for generating hospitality-level returns. Additionally, Wander REIT presents an opportunity to institutionalize the STR market, which is currently largely fragmented, with mom and pop operators dominating the sector. By creating a new asset class and setting standards in the STR market, Wander can extend its high-quality brand to investors.