Guided by experience and risk-adjusted return prognoses we are committed to investing to create value from acquiring, improving, and selling high-end retail properties and mixed-use high-end retail/office properties located in premium sub-markets within the dynamic and vibrant large cities of the United States and Europe (opportunistically and very selectively).
We are guided by a few strongly held beliefs, principally:
- We acquire “Properties that tenants want to occupy, and investors will compete to own”. These are products of location quality and building layout.
- We believe there is “a time to buy, and a time to sell”.
- Unlike many large Assets Managers, we are under no pressure to invest or to over-hold in order to generate management fees. We have sat on our hands for extended periods of time when we felt it was not opportune to invest. Generally, this is due to our perception of specific markets having structural issues or being over-heated as it can be difficult to execute a “value-add” strategy in a structurally challenged or over-heated market sector as values at some stage will trend downwards.
- Warren Buffet’s phrase “be fearful when others are greedy and be greedy when others are fearful” is not a license to be reckless when markets are imploding. Rather we see it as call to be awake with a sentinel eye for early signs of opportunity and growth and then act purposefully.
- Our discipline calls for on buying a property, to immediately start positioning it for sale with our target buyer being public REITs, high net worth families, or institutional investors, for their core portfolios.
- Our target hold-period is to exit in three to five years. This approach forces disciplined and realistic underwriting when assessing investment opportunities. Given the rate of technological change we have some chance of forecasting three to five years into the future – going beyond that we are increasingly entering the unknown.
- Pre-acquisition underwriting includes addressing these questions:
- Can assets be acquired at a favorable price relative to replacement cost and market facts?
- Will cash-flows survive without additional capital if negative events happen?
- How do we improve value, what will this cost, and how long will this take?
- Can we get out within our target hold period?
- Complete alignment of interest with our equity partners is central to our investment philosophy:
- We co-invest with our equity partners and our primary renumeration is a success based promote model – our motivation is to maximize return in as short a time as possible.
- We do not charge asset management fees or other add-on fees such as debt procurement or construction oversight (unless it is a development project).
- We charge an Acquisition Fee, usually 1% of transaction value.