Investment Strategies and Criteria - Acquisitions, Joint-Venture, Senior and Mezzanine Debt/Preferred Equity, and Construction Lending - American ...
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Investment Strategies and Criteria Acquisitions, Joint-Venture, Senior and Mezzanine Debt/Preferred Equity, and Construction Lending
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About ARA Acquisition Investment Criteria Property Type Strategies
A Focus on Quality Institutional Real Estate Assets
ARA is a premier private The American Realty Advisors, LLC (“ARA”) Investment Team sources, underwrites, ARA seeks to invest in institutional-quality industrial, multi-family and single-family Our research-driven
screens, negotiates, and closes all investments consistent with our clients’ rental, office, and retail properties and other select investments, either directly or
equity real estate investment investment strategy
investment guidelines. With a local presence and a deep understanding of each through joint-ventures or debt structures. Our research-driven investment strategy
manager of institutional market, our experienced professionals source opportunities nationwide through an for core assets evaluates the merits of any proposed acquisition and is illustrated for core assets
quality commercial real extensive network of principals, partners, brokers, developers, lenders, industry below by specific property type examples. evaluates the merits
estate portfolios with more contacts, and local market experts. This network of sources has been developed and of any proposed
refined over more than 30 years of active market participation at all stages of the ARA also pursues core-plus and value-added investment opportunities in the
than 500 investors and over above property types that include the following strategies: renovation, re-tenanting, acquisition
investment cycle. Our intensive due diligence process reassures potential sellers/
$10.1 billion1 in assets under partners that expected transactions can be executed quickly and successfully. repositioning, lease-up opportunities, distressed debt/ownership, poorly-managed
management. assets, re-capitalization, significant near-term lease rollover, market recovery, and/
ARA values the strong relationships with our partners and borrowers and we have or development.
built a reputation as a trusted and reliable investor who has been active in U.S.
ARA is 100 percent
institutional real estate. We continually seek to establish new relationships with
employee owned and client experienced real estate operators and strengthen our current joint-venture partner Examples of Core Assets
focused and currently has and borrower network to invest in quality real estate assets throughout the U.S.
more than 90 employees. ARA has flexible capital available for workouts, restructures, partnership buy-outs/
OFFICE
RESIDENTIAL
resolutions, debt purchase, development projects, and property acquisitions.
The firm was registered in
1990 with the U.S. Securities
and Exchange Commission Real Estate Investment Parameters
as an Investment Advisor
under the Investment
Property/portfolio acquisitions or recapitalizations,
Advisers Act of 1940.
direct equity, joint-venture equity, mezzanine and
Investment Structures
preferred equity, high leverage senior loans and full
ARA is also a fiduciary to its capital stack debt and equity structures
clients and acts in the best 121 Seaport | Boston, MA Northshore | Austin, TX
interests of our investors. > Best-in-class office properties > Strong housing markets
> CBD and urban districts > High-income demographics
Investment Strategies Core, core-plus, and value-add
> Transit-oriented properties > Modern design
> Strong industry demand drivers > Transit-oriented locations
> Near employment and retail centers
Office, industrial, retail, residential (multi-family
and single-family rental), and select investments in
Asset Types hotel, medical office, self-storage, climate-controlled
INDUSTRIAL
INDUSTRIAL
warehouse, life sciences or lab, mixed-use,
entitlement, and/or age-restricted housing
$20 to $500 million (the acquisition of smaller
Target Investment Size
industrial assets will be considered)
All cash or moderate use of leverage (up to 65%)
Leverage including the assumption of debt as part of an
acquisition
Logan Logistics Center | Logan Township, NJ NYC Urban Logistics Center | New York, NY
3 to 7 years; with longer terms up to 10 years > Class A bulk distribution and light manufacturing > Strategic last-mile locations
Investment Terms
considered for core strategies > Port and supply-constrained locations > Pricing reflective of lease term, tenant credit, property
1
as of March 31, 2021 > Newer or functional older properties and characteristics
> New construction to target user-demand
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Joint-Venture Investments Lending ARA’s lending programs offer a full range of senior and subordinate debt products,
including senior loans, mezzanine loans, and preferred equity. Lending strategies include
financing new construction, value add, and special situation/distressed opportunities.
ARA’s loan products provide flexibility and solutions to Borrower’s that are not available
from conventional bank financing or debt funds.
JV Investment Parameters
Investment Structures Joint-venture equity and preferred equity
Equity Investment Size $15 to $150 million (will consider higher size in certain situations)
$20 to $500 million (per asset) - (the investment in smaller industrial assets
Gross Deal Size
will be considered)
Senior Leverage 50% to 65% (will consider higher leverage in certain situations)
Investment Terms 3 to 5 years; with longer terms up to 10 years considered in select circumstances
10%+ internal rate of return, depending on leverage/risk. Preferred returns
Yield Parameters
(joint-venture equity) range from 7% to 10%
Existing income-producing assets and transitional institutional-quality projects of the following
commercial real estate types: industrial, multi-family, single-family rental, office, retail
Asset Types (preference for neighborhood centers anchored by grocer/drug stores), mixed-use, and select
investments in hotel, medical office, self-storage, climate-controlled warehouse, life science
and lab, land, and/or age-restricted housing
Acquisitions, repositionings, workouts, recapitalizations, lease-ups, partnership
Asset Types
buy-outs and restructures
Representative Joint-Venture Real Estate Transactions
Ellie Apartments | Austin, TX Pacific Commons Logistics Center | East Bay, CA
> Targeted Austin as a growth > New (completed in 2020),
market with significant corporate state-of-the-art logistics/
and population in-migration fulfillment center in Fremont,
CA - positioned to serve the
> Acquired off-market at favorable
entire Bay Area and Northern
basis in partnership with
seasoned national operator
California Lending Parameters
> 100% leased to a Fortune 50
> Upgrade unit interiors and Size $15 to $100 million
tenant
community amenities while
offering lower rents relative to > Municipal restrictions on future Up to 80% of project cost on senior loans and 90% of project cost on subordinate debt
Maximum Loan to Value
newer product competitive development products
Markets Top 25 markets nationwide
Villae ATX | Austin, TX Cottages at Leon Creek | San Antonio, TX Loans can be structured as either fixed or floating and have accrual features. Interest rates
Interest Rates are dependent on the characteristics of the transaction and type of lending product utilized
> To-be developed, 65-unit > Capture growing demand in
(senior or subordinate debt)
single-family rental property on single-family rental by converting
3.16-acres cottage-style student housing Terms 3 – 7 years
> Favorable investment basis community to single-family rental
Primary product types are industrial, multi-family, office, and retail, Will also consider other
compared with existing stabilized > Acquired off-market at discount to Product Types
product types on a select basis
residential product in the replacement cost and recent SFR
market which are trading above Will finance new construction, value add, and special / distressed situations. For value add
sales
replacement cost Parameters and special / distressed situations, there is no minimum cash flow and/or debt yield
> Execute interior and common requirements
> Purpose built community to amenity renovation plan
capture high-demand for single- Non-Recourse Loans are non-recourse subject to standard non-recourse carve-outs
family housing with direct access
garages and attractive layouts Sponsor Profile Prefer sponsors with local market knowledge and experience in the product type
SOUTHPARK TOWNHOMES EXECUTIVE SUMMARY
11410 OLD SAN ANTONIO RD, AUSTIN, TEXAS FEBRUARY 2020
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Meet Our Team Investment Officer Coverage Map
Target Metropolitan Areas
ARA’s Senior Investment Group Kirk Helgeson
professionals have approximately 20 Chief Investment Officer
Los Angeles, CA
average years of experience in the khelgeson@aracapital.com
investment and real estate industry. 213.233.5779
Northeast
West Region - North West Region - South West
Region -
North Mid-Atlantic
Albert Pura Patrick Lataitis
Senior Director Associate Director
San Francisco, CA Los Angeles, CA Central Region
apura@aracapital.com plataitis@aracapital.com
415.623.5700 213.233.5784
Southeast Region
West Region - South
Southeast Region Northeast & Mid-Atlantic Regions
Peter Williams Eric Cannon
Director Senior Director
Los Angeles, CA Radnor, PA
pwilliams@aracapital.com ecannon@aracapital.com
213.233.5760 484.581.1191
Key Markets
Central Region Structured Finance/Debt
Northeast &
West Region - North West Region - South Central Region Southeast Region
Mid-Atlantic Regions
Daniel Robinson
Xander Dyer Albert Pura Patrick Lataitis Xander Dyer Eric Cannon Peter Williams
Managing Director,
Senior Director Finance and Investment
Boston, MA Consulting Pacific Northwest Pacific-South Midwest Northeast Southeast
xdyer@aracapital.com Los Angeles, CA Portland Inland Empire Chicago Philadelphia Atlanta
Seattle Los Angeles Minneapolis New Jersey Nashville
214.584.6063 drobinson@aracapital.com Ventura New York N. Carolina
213.233.5742 Pacific-North Mountain
San Diego Boston Florida
Bay Area Denver
Orange County Connecticut
Salt Lake City
Desert North
Due Diligence Dispositions Desert South Mid-Atlantic
Reno Southwest
Phoenix Baltimore
Austin
Las Vegas Washington D.C.
Dallas
Houston
Don Pecano Bill Pantazopoulos
Senior Vice President, Senior Vice President,
Due Diligence Dispositions
Los Angeles, CA Chicago, IL Bill Pantazopoulos - Senior Vice President, Dispositions
dpecano@aracapital.com bpantazopoulos@aracapital.com
213.233.5798 312.216.4711
Don Pecano - Senior Vice President, Due Diligence
This brochure is for your information only, is not intended to be relied on to make any investment decisions, and is neither an offer to sell nor a solicitation of an offer to buy any securities or financial instruments in any jurisdiction. Past performance of any kind referenced in this brochure in connection with any particular strategy should not be taken as an indicator of future results of such strategies. It is important to understand that investments of the type referenced in this brochure pose the potential for loss of capital over any time period. Photos used in this brochure were selected based on visual appearance and are used for illustrative purposes only to reflect strategies followed by ARA in the past. This brochure should be considered confidential and may not be copied, reproduced, republished, or posted in whole or in part, in any form and may not be circulated or redelivered to any person without the prior written consent of American. Forward-Looking Statements: This brochure may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are statements that do not represent historical facts and are based on our beliefs, assumptions made by us, and information currently available to us. Forward-looking statements in this brochure are based on our current expectations as of the date of this brochure, which could change or not materialize as expected. Actual results may differ materially due to a variety of uncertainties and risk factors. Except as required by law, we assume no obligation to update any such forward-looking statements. To learn more about our equity and debt investments, visit: www.aracapital.com/equity-and-debt-investments 515 S. Flower St., 49th Floor, Los Angeles, CA 90071 T 213.233.5700 | www.aracapital.com Printed in-house | ©2021 American Realty Advisors
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