Inside Luol Deng’s Towering $125 Million Portfolio

Luol Deng has spent 15 years within the NBA and has all the time put up strong numbers, averaging almost 15 factors per contest over 900-plus video games. The 34-year-old ahead, who performed for the Minnesota Timberwolves this previous season, has by no means been the headliner on any of the 5 groups he’s performed for, however he does have a pair of All-Star Game alternatives on his résumé. It is the type of lengthy profession that’s fairly profitable in right this moment’s NBA, the place the wage cap exploded due to the tripling of the latest TV contract with ESPN and TNT. The consequence—Deng’s profession earnings on the courtroom are $151 million.

But the Sudanese-born Deng is just not ready for the top of his taking part in days for his subsequent massive rating. He’s been investing in actual property virtually for the reason that time he entered the league in 2004 and has amassed a formidable portfolio—resorts, resorts, condos and condo buildings—value $125 million.

Deng is a part of a brand new crop of sports activities stars leveraging their fame and fortunes in new ventures and placing whereas the iron is scorching. In the NBA alone, you may have present gamers like Stephen Curry, Blake Griffin and LeBron James launching movie manufacturing corporations; Andre Iguodala and Kevin Durant are energetic enterprise capital buyers; and Carmelo Anthony and Derrick Rose are additionally engaged in large-scale actual property offers.

“If you know the market and you are using your leverage and doing the right deals, it is really nonstop with the opportunities,” Deng says.

Real property may not be as horny or generate the headlines of athletes pouring cash into tech startups, however the potential returns could be rather more profitable. The new 2017 tax legislation raises that threshold even greater with the creation of Opportunity Zones.

O-zones permit buyers to plow latest capital beneficial properties into initiatives or corporations in low-income areas in every state. Gains compound tax-free, and there are not any limits on how a lot cash you place in and the way a lot tax you’ll be able to keep away from. There are almost 9,000 designated O-zone areas, that are required to have a poverty price of no less than 20% or a median family revenue that’s lower than 80% of that of the encompassing space. Deng and no less than a half-dozen NBA stars are a part of Our Opportunity, which is a brand new O-zone fund in search of to boost $300 million this yr.

Deng and Rose had been cornerstones of the Chicago Bulls firstly of the last decade when the group posted the NBA’s finest file in back-to-back seasons. The budding dynasty flamed out when Rose tore his ACL in the course of the 2012 playoffs. Deng was traded by Chicago in 2014, and Rose was shipped out to the New York Knicks two years later. 

The pair had been reunited this previous season with the Timberwolves and mentioned their post-playing careers. The results of these talks have them again in Chicago on the verge of closing a large actual property deal to amass three websites comprising 23 buildings totaling 354 multifamily models at a value of $25.6 million. Two of the three websites are in O-zones.

Off-Court Hustles

These NBA stars have budding media empires, whereas different basketball gamers have poured cash into startups or actual property.

“I’ve always had a love for real estate and wanted to do something in Chicago for a long time,” says Deng, who spent 10 years taking part in for the Bulls.

The 2019 NBA Draft came about Thursday night time in Brooklyn with freshmen Duke sensations Zion Williamson and R.J. Barrett among the many first three picks. It was 15 years in the past that Deng was additionally a freshman Blue Devil and top-ten decide. He stands as a job mannequin on and off the courtroom for his fellow Dukies.

Deng was born in Sudan and later lived in Egypt and England earlier than transferring to the United States to play basketball at age 14. After one yr at Duke, he was chosen seventh general within the 2004 NBA Draft. Only Dwight Howard and Iguodala have generated greater profession “Win Shares” from that draft class.

He began with investments in East Africa and London earlier than placing his cash to work within the U.S. in every thing from spec homes within the Hamptons to multifamily models in Baltimore to the Virgin Hotels Las Vegas and a luxurious resort within the Bahamas beneath his firm’s banner, D3N9, which is a play on his identify and variety of siblings.

Deng says he has leaned on mentors like actual property entrepreneur Don Peebles and JPMorgan Chase CEO Jamie Dimon. He was good buddies with Dimon’s daughter at Duke, and the banking titan was based mostly in Chicago as CEO of Bank One and welcomed Deng to the town when he was drafted by the Bulls.

Deng’s fundamental sounding board is former Wall Street banker David Gross, who serves as chief funding officer of D3N9, in addition to CEO of the Confluent Group, an funding advisory. The two related in 2014 via a mutual buddy whereas Gross was at Columbia University getting a grasp’s diploma in actual property growth. Gross pitched the varsity on a certificates program for athletes and entertainers investing in actual property. Columbia handed, however Gross partnered with Deng and bought the NBA Players Association to signal on.

NBA salaries have soared over the previous decade, however the stigma of the participant blowing via all of his cash in retirement stays; an oft-cited 2009 Sports Illustrated article on the monetary perils of professional athletes claimed that an estimated 60% of NBA gamers had been broke inside 5 years of retirement. Deng hoped to alter that trajectory along with his actual property symposium for gamers. The inaugural two-day occasion in 2015 attracted a dozen gamers and centered on investing in industrial actual property. Expanded funding summits came about the following two years.

“We discuss gamers going broke, however we don’t discuss why that’s occurring,” Deng says. “The symposiums were a way to teach players about real estate and foster better understanding of these kinds of investments.”

Gross helped Deng formalize his actual property holdings beneath D3N9, and the corporate now has seven staff. Gross launched the Our Opportunity coalition this yr with lately slain rapper Nipsey Hussle, and Deng was an authentic investor. The concept is to make use of Opportunity Zone investments that includes “local heroes” from these notably O-zone areas.

In February, Nipsey and Gross purchased a plaza within the Crenshaw neighborhood of Los Angeles the place the group activist was born. While Hussle was tragically shot and killed in March, Gross plans to maneuver ahead with the redevelopment of the property with a six-story residential constructing atop a industrial plaza.

The Crenshaw challenge and Deng’s Chicago funding function blueprints for what Gross needs to do in no less than ten cities, together with Cleveland, Miami, New Orleans and Philadelphia. The premise has a pair of well-known figures spearheading O-zone investments in every neighborhood.

Deng was the primary hoops star to hitch Our Opportunity and has helped open the doorways to different NBA veterans. Rose, Anthony and Josh Smith have since dedicated to the challenge. Anthony, who additionally invested with Deng within the Virgin Las Vegas, is the face of the funding in his hometown of Baltimore, which incorporates 91 models in a deal that may shut this summer season.

“Each has deep personal, civic and social ties to the communities and is committed to leveraging their personal brands and resources to radically change the status quo in the places they call home,” Gross says.

While Deng says he isn’t fairly prepared to hold up his high-tops, he can be searching for a brand new contract as NBA free company unfolds subsequent month. He remains to be owed $15 million by the Los Angeles Lakers, as a part of the four-year, $72 million contract he signed in 2016 (the Lakers and Deng reached a buyout settlement on the ultimate two years of the deal in 2018). But his authentic aspect hustle has set him up for a profitable second profession.

“I don’t think anyone has invested in real estate to this scale and level of sophistication while they are still an active player,” Gross says. “Most individuals wait till they’re completed. Luol goes to hit the bottom working.”

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