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Value-Added Investments
- Development satisfies unmet demand
- Development conducted in areas with barriers to entry
- Property requires substantial renovation, repositioning, recapitalization or financial restructuring
- Property has unrealized potential
- Purchase price is below replacement cost
- Property is located in a growth area
- Current owner is motivated to sell
- Focus on properties owned by motivated sellers unable to refinance and lenders with delinquent loans that cannot be extended
Investment Terms
- Mid-sized properties, typically requiring an equity commitment of $5-15 million, with total cost generally between $20-40 million
- Joint venture partner equity contribution, often equal to 10% of total equity commitment
- Property holding period generally 3-7 years
- Preferred leverage ratio of 60%-70%
