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Acquisition and Management Strategy
- Focus on US income producing commercial real estate
- Currently the suburban office market of Chicago, Illinois and Atlanta, Georgia
- Target acquisition size of $20-90 million range
- Acquire properties with capitalization rates on acquisition of 7.5% and higher
- Occupancy levels between 70% and 90%
- Acquire properties at a significant discount to replacement cost
- Focus on properties with strong credit-worthy tenants and long term leases in place
- Add value through lease-up of vacant space and maximize lease renewal rates upon maturity
- Strict management of operating expenses
Financing Strategy
- Maintain leverage at reasonable ratios of property value (target 55-75% LTV)
- Lock in low fixed rate mortgages with medium to long terms
- Utilize assumable mortgages when available
- Mortgages on non-recourse basis
- Stagger debt maturities to avoid concentration
- Use the top lenders that are consistent with our strategic plans
Investment Attributes
- High return on equity due to spread between capitalization rates and financing rates
- Consistent quarterly cash distributions (paid since inception)
- Potential for increased distributions due to contractual rental income increases
- Opportunity to participate in unit offerings at significant discount to appraised net asset value
- High growth real estate investment trust still in its growth phase
- Enviable position relative to peer group based on high cash distribution and growth potential
