We are value-add investors focused on acquiring commercial real estate properties located in mature, in-fill submarkets surrounding the 24-hour gateway cities in the United States and in select secondary Central Business Districts. Specifically, we target “non-core” properties, rather than aggressively priced “trophy” properties and we actively work to increase value through our extensive and hands-on management.
Since 1993, we have acquired 185 buildings that consist of: suburban office; secondary-market CBD office; grocery-anchored retail shopping centers; unanchored community retail and life-style shopping centers; industrial and research & development properties; multifamily apartments; unfurnished residential housing development communities; and gas stations with convenience stores.
Our singular goal is to earn outsized, risk-adjusted returns for our clients. We do so by targeting properties in “early-stage recovery” markets that have been neglected and are in need of capital improvements, that have laid fallow with limited new leasing activity due to under-capitalization, often from distressed owners who are having difficulty servicing debt. We do so because history has taught us that we can generate higher risk-adjusted returns for our investors employing this strategy than buying low cap rate “core” assets in major markets.
Our investment methodology stems from the extensive economic, credit cycle and market-specific research we conduct, including occupancy and absorption trends; new construction; development and property replacement costs; landlord concessions; state and federal regulations; and political, demographic and employment trends. We also research and act on very specific micro- and macro-economic indices and employ an “outside the box” perspective as we study and interpret the investment horizon and search for creative and innovative investment opportunities. This combination of the “top-down” and “bottom-up” research approach informs our investment strategy, determines our market and submarket selection and influences the timing of when we enter or exit a property, portfolio or market.
We are demonstrably different from the majority of our private equity real estate peers, in that we deliberately and proactively seek to acquire buildings and invest in markets that are out-of-favor and further from recovery. We do so for the simple and time-tested reason that we can buy things cheaper and achieve much greater returns for our clients than by following the crowd and by buying what and where everyone else is buying.
— Kurt M. Zernich, Senior Managing Director, Director of Asset Management
and General Counsel