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Our Investment Process

Diligent Execution, Exceptional Results

Identify Opportunities

Our history in the commercial real estate market in metro areas throughout the Western U.S. and our extensive broker and lender network are key to our business development activities.

For regular flow of on- and off-market investment prospects, we depend upon our relationships in the commercial real estate investing community, our broker-lender network, and our Board of Advisors, all of which enable us to continuously identify new acquisition targets.

Once an opportunity enters our evaluation stage, we assess its potential and look for indicators that we can make a positive impact on the property, including:

  • Historical mismanagement due to owners’ lack of capital investment or inattention to rent roll, maintenance, and/or marketing to prospective tenants.
  • Poor fit with current owner’s portfolio, often including lender-owned properties.
  • Excessive use of leverage and/or capital deficiencies.
  • Unfavorable transaction appearance due to perceived complexity or lack of appeal.

Additional factors that cause many of our target opportunities to be labeled “distressed” include macroeconomic conditions and technical factors such as current available inventory, debt maturities, and temporary valuation shifts. When we assess the viability of an opportunity, we consider the trends that may be affecting these factors as well as conditions we can positively impact.

Our network and relationships give us access to a well-stocked  pipeline of current investment opportunities.

We take a disciplined approach to value engineering property improvements in order to avoid unnecessary capital expenditures.

Classify Issues

Value engineering helps us classify the level of improvements each asset will require to meet its value creation target.

In considering upgrades for a subject property, we aim to mitigate property-specific issues including:

  • Neglected standard operating capital improvements.
  • Obsolete interior spaces and exterior façades.
  • Inefficient or dysfunctional floor plans.
  • Low occupancy and below-market rents.
  • Poor reputation in the marketplace.

We classify all necessary improvements before our underwriting process begins, ensuring that we are taking a holistic view of every asset under consideration. Our deep operational experience allows us to know ahead of time what upgrades will most efficiently benefit a given property.

Define Strategy

For each acquisition, we establish an asset business plan based on market- and property-specific information.

Our asset business plan is the core of our entrepreneurial approach to optimizing each property we acquire. It defines a roadmap for the property over the life of the investment and considers:

  • Positioning the property appropriately according to its profile, market, and potential.
  • Cash flow assumptions based on financial analysis, reinvestment, and distribution expectations.
  • Improvement plans value-engineered to reorient the asset with efficient spatial utilization and property upgrades.
  • Arbitrage opportunities which sometimes allow us to acquire assets at low prices and quickly create value through improvement and disposition.
  • Overall project pro formas and exit strategies modeled from experience in the industry and each market.

The asset business plan enables us to position the property at the top of its competitive set with the potential to maximize returns.

Our asset business plan is our operational roadmap to maximizing returns.

Swift, agile transactions are our hallmark, based on decades of experience and close-knit connections.

Close Transactions

We have the team and resources to execute on efficient transactions, including short escrow periods and certain closes.

Our team has decades of experience working together and closing transactions. We have built close-knit connections with esteemed partnering lenders because of:

  • Our history and familiarity with acquiring and operating multi-tenant business parks.
  • Our experience with the complex diligence process common to this asset class.
  • Our relationships, reputation, and track record in the industry.

Partnering lenders work with us to quickly underwrite, document, and fund loans at low market rates and optimal loan-to-value ratios. Our ability to swiftly close gives us a significant advantage over other buyers, especially in fast-moving and competitive sale processes.

Create Value

Our asset management teams actively create value in our properties.

In the first three months to a year after we acquire a property, we undertake an intensive period of adaptive repositioning. Our revitalization process includes resolving issues related to leasing, maintenance, appearance, and function, with the goals of:

  • Executing quickly on our asset business plan to bring the property up to our exacting operating standards;
  • Upgrading the asset’s position within its competitive market subset;
  • Providing best-in-class service to tenants and outperforming competitors, leading to longer-term tenants and lower vacancy rates; and,
  • Instilling cooperative leasing in the market.

The combination of systematic upgrades, improved perception, and hands-on management serves both to shed negative impressions associated with prior ownership and to create value for investors through quarterly cash flow and upon sale of the property.

We take each asset through a complete image revitalization to create a new brand of ownership.

Maximum operating cash flow and properly timed exits are our two-pronged approach to delivering reliable returns.

Earn Returns

We deliver significant returns by operating each asset for maximum cash flow and properly timing each exit for maximum ROI.

We generate returns from two sources:

  • On any given investment, once the underlying asset has been stabilized, we look to distribute to investors 7%–10% of invested capital on an annualized basis, payable quarterly.
  • We enter every transaction with a minimum ROI targeted in each asset’s pro forma. By operating with strong cash flow we have the flexibility to choose optimal timing for exit events.

Our investment model anticipates distributing reliable cash flow on invested capital across all stages of market cycles.

Grow the Portfolio

We look to build a suite of assets diversified among the metro markets we know intimately.

We employ our stocked pipeline, preferential lending relationships, and poised deal execution teams to build our portfolio.

The Western United States as a whole, and its major cities in particular, are currently seeing expansions in potential tenant bases for our target investments. This favorable dynamic is due to strong venture capital funding and climates and cultures in which entrepreneurship is thriving.

By diversifying across metro areas, we limit our exposure to risks that may affect any one market while taking advantage of widespread but unrecognized opportunity within this niche asset class.

By diversifying across regions, we limit our exposure to risks that may affect any one market.