Macro/micro research & analysis followed by stringent fund offering structure to align our 3 main criteria;
“Does the investment have the ability to outperform?”
“Is it differentiated & relevant in the marketplace?”
“Does it solve a problem for the LPs and for the (potential) revenue generators of the fund?”.
Potential investments are based off the investment thesis. Records and data will be collected by our street and office teams, to gain insight to potential acquisitions. Attempts are made via online, area marketing, radio, and direct to reach out to potential sellers. Special websites, CRMs and call centers are engaged. Existing relationships and new contacts are sought out by the origination team. Majority of assets are screened out based on location/asset type/age/quality. Remaining assets are assessed on cap rate and price, numbers are entered into a financial model. This process takes about 30 seconds. If value is shown, further information such as rent rolls, tax, incorporation information, debt, financials is obtained. Price discussions occur and financial model is updated. Upside or hidden value is analysed. Assessment is made to go or abandon deal. Level 2 screen is outsourced for outstanding liability, tax, ownership confirmation, environmental issues. Site visits are conducted, underwriters are approached, model updated. If valuation is in line, a draft property summary board is informally pitched, if go, building study/phase 1 environmental conducted. If no issues, then a no-shop lockup agreement is formed. Network of underwriters approached with package. Mindful of transaction costs.
Based on existing LPA criteria, capital is deployed after LP investment committee approves. Typical, well documented building close procedure.
Manage & Monitor:
Assets are documented and budgets matched from investment phase are implemented, research and screening phases are ongoing to monitor market fundamentals. Any value adds are budgeted/implemented. Outsourced credit monitoring. Lease renewals are staggered. We actively tour and are hands on managers, speaking with our tenants often. Leasing is outsourced.
Ongoing research is used to quantify best divestment of assets congruent with fund liquidation data. Last minute yield enhancements to maximize value are implemented. Transaction costs kept to a minimum.