acquisition criteria
short term strategy
The asset classes we seek are multi-tenant office buildings, anchored shopping centers and apartments. The properties holding period is intended to be 18 to 36 months. The qualifiers include, but not necessarily limited to, at or below 40% of replacement cost, at or below 40% of market rental rates, at or below 40% of replacement cost rents, typically under 75% occupancy, WALT of 2 years, 30 years old or more, with deferred maintenance, dated and/or architecturally unappealing curb appeal, in need of upgrading, neglected by ownership, absent or ineffective marketing, financial distress and very poor management.
Essential elements that we attribute to our proven track record and success is our, exceptional judgment, vision, penchant to be conservative, always focusing on the downside and properly and realistically assess the risk profile and recognize that not all distressed assests can be saved.Short TERM CRITERIA
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- Asset classes: office buildings, shopping centers, office-flex and apartments.
- Locations: Western U.S. in major metropolitan cities/sub markets and Southeast Florida.
- Opportunistic/value added properties. Typically pre-2000 construction.
- Under 40% of replacement costs.
- Needs rehabbing, renovation, improvements inside and out, can be 70% or less leased.
- $15 million to $100 million.
- 18 month to 30 month hold.
Long TERM CRITERIA
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- Asset classes: Class “A” office buildings, shopping centers and office-flex.
- Locations: Western U.S. in major metropolitan cities/sub markets and Southeast Florida. Suburban or CBD.
- 100,000 SF, minimum class B+.
- $20 million to $100 million in excellent condition, predominantly leased, post 2015 construction.
- 50% or less then replacement costs.
- 90% + leased.
- +/-10 year hold.
Long Term Strategy
The asset classes we seek are multi-tenant office buildings and anchored shopping centers. The hold period is planned for 8 to 10 years. The qualifiers include, but not necessarily limited to, at or below 50% of replacement cost, at or below 75% of market rental rates, at or below 50% of replacement cost rents, 10 years or less since built, excellent condition with minimally anticipated capital expenditures, architecturally & aesthetically appealing, at least Class B+ asset, occupancy no less than 90%, stable income stream with low tenant rollover exposure, no leased space that if vacated would attribute more than 8.0% loss in the total gross income, WALT of 4 years and with limited significant income degradation such as caps on rental increases, tenant lease options to renew that prohibit the ability to continue to increase rental rates, unless very low financial impact, expectation that rents will double during the hold period, and the determination that any projected future tenant improvements will be limited.
The property locations must past the test of being a minimum of ‘very good’ condition, improving area with steady growth forecast, above average regional household incomes, executive housing in close proximity, vibrant retail shopping centers and eateries, low crime, good to very good schools and the highly confident belief through research and analysis that we will achieve the desired ROI. Finally, in terms of the debt profile, we seek financing not in excess of 50% of the purchase price and to provide for set-aside reserves so funds are in place should any needed improvements be required.