Although Shopoff Properties Trust has only recently enteredescrow on its first deals, the REIT filed its first preliminaryprospectus with the SEC in November 2006 in anticipation that landprices would fall and properties that ran into trouble would beavailable at significantly lower prices. Shopoff—who serves as theREIT's chairman, president and CEO—says that he and his team"thought there would be a retrenchment," but prices have falleneven farther than they expected.

The business plan for Shopoff Properties Trust involvesacquiring the land and then taking whatever steps are necessary,such as completing entitlements that the previous owner had startedon, to re-sell the the property to home builders or developers. Ina few cases the REIT might be able to just buy a piece of land, siton it for a while and then sell at a profit, but Shopoff says thatwill not be the case with most properties it buys. "Most of thesedeals have some other problem than just the financial structuring,"the Shopoff CEO explains. "There is often still some entitlementwork that needs to be done, or some re-entitlement to make theasset viable. We might buy a subdivision and have to protect theapprovals that the previous owner got."

The new REIT is focusing primarily on land for residentialdevelopment, but "We will buy any type of land asset that meets ourcriteria," Shopoff says. For example, the REIT is looking at onedeal that is a master-planned site with plans for office,industrial and residential development. The company is not lookingfor raw land at present but instead is focusing on "property thathas a concept attached to it," typically a plan for a residentialsubdivision or a combination of residential and commercial,according to Shopoff. Most of the land the REIT is looking at is inthe West and the Southwest, including California, Arizona, Nevada,Texas and Hawaii.