Philosophy

Capitalize on Distressed Markets 

• Real estate investing cannot be considered in isolation from other investment alternatives. Constantly analyze all asset classes because the flow of funds can overwhelm fundamentals, resulting in short term anomalies.
• Anticipate market movements – shifting among asset classes, geographies and within the capital structure – and shift focus as market conditions change. Often a change in tax code or another government intervention will create a unique opportunity to achieve an attractive risk-adjusted return.
• Capitalize on inefficiencies created by market disruptions, investor turbulence or a capital void following a period of oversupply. 
• Seek complex, distressed multi-party situations that we are well-equipped to underwrite. We are able to generate outsized gains relative to risk through such public-to-private, private-to-public and reorganization opportunities.
• Look to the global public markets for disparities between public and private markets in order to deliver attractive returns.

 

Create Value Throughout the Investment Cycle 

• Most real estate is a commodity with clear windows to buy, hold and sell.  
• Focus on supply and demand fundamentals and target markets where supply is constrained and diversity of demand exists. 
• Acquire assets at deep discounts to relevant replacement cost. 
• Add significant value through executing a clear asset management and financial restructuring plan. Manage assets in-house and pay close attention to the structure and governance of each asset. 
• Partner with local experts who bring unique market knowledge to bear and share our investment principles. 
• Consider the exit to be as important as the acquisition. Constantly reassess the best time and method to exit to maximize returns.

Optimize Risk-Reward and Preserve Capital 

• All investing is measured by risk and reward. Place a premium on protecting and preserving capital. 
• Balance current cash flow with residual value, seeking to minimize dependence on long-term residual appreciation. 
• Structure transactions with a modest leverage level that ultimately reflects the underlying risk of the asset’s cash flow stream. 
• Match rate and duration with asset cash flow characteristics and hedge speculative characteristics. 
• Focus on sustainable yield as it is of paramount concern in a risk-averse world and low interest rate environment. 
• Align interests with those of our investors and invest alongside our partners in every transaction we sponsor. 

Exercise Discipline and Employ Common Sense 

• Intellectual humility is the centerpiece of consistent and successful investing. Challenge investment theses routinely. 
• Build a team with diverse skill sets and the ability to identify opportunities where specific market and operating expertise can be leveraged. 
• Employ individuals who display sound judgment and actively and regularly invest through applying common sense to rigorous, fact-based analysis. 
• Link asset management to acquisitions to learn from mistakes, and always focus on performance improvement.