Our overall strategy is to acquire, transform and sell real estate assets that have significant value creation potential over a 3 to 5 year individual project lifecycle. We employ moderate amounts of leverage to increase yields to investors while mitigating the downside risks inherent in any real estate investment. “Typical” projects will include office, multi-family, “flex” industrial and mixed-use, including portions of retail, which are underperforming the market. Through disciplined underwriting and superior execution of each project’s operational plan we realize above market growth in net operating income. A schematic representation of our strategy is shown above.
Value Creation
Conservative Asset Evaluation
Brass Funds evaluates over 1,400 potential acquisitions annually. The Brass Evaluation Process yields approximately 25% of the assets as Brass Quality. Offers are based on conservative investment criteria that result in an acquisition to offer rate of approximately 1%. Historically, our conservative approach has enabled Brass Funds to capitalize on the performance of our operations, not just market conditions.
Brass Funds’ platform is designed to maximize operational efficiencies throughout the hold period of the asset. Magi Real Estate Services and Complete Construction Management provide marketing and leasing, property management, and construction / renovation services to the acquisitions of Brass Funds. These service companies afford Brass Funds the ability to respond in real time to the needs of tenants. The Brass Approach as an owner and operator translates into above market absorption and retention that facilitates true value creation.
Investment Optimization
Brass Funds employs a “managed risk” approach to investing. This means that projects are evaluated and capital is stacked in such a way as to provide a balance between expected return and staying power in the event economic conditions deteriorate. Leverage is used prudently to enhance returns to equity, while keeping loan to value and debt service ratios at moderate levels.
An important component of our risk management strategy is diversification – by property type and
geography. It also involves sourcing projects in “non-traditional” market segments, avoiding the wild swings associated with “faddish” markets like South Florida, Phoenix, Las Vegas, and much of the two coasts. Brass has had considerable success in markets such as Central Texas and suburban Denver where population and job growth is strong, but steady and the political climate is consistently “pro-growth.”
Strategic Objectives
Cautious Opportunistic Approach
Investing ahead of market cycles using up to date market information to stay ahead of market cycles.
Markets
Texas, Colorado, Florida, Louisiana, Arizona, and New Mexico.
Recovering Markets
Assets that are located in recovering markets from real estate down cycles.
Operational Efficiency
In-house construction, leasing, and management, facilitates efficiencies that maximize value creation over the asset hold period.
Value Added Execution
Intensive management to strive to maximize value creation through local market knowledge in select markets and assets.
Complex Assets
Single properties and portfolios requiring restructuring, repositioning and/or redevelopment opportunities.
