Our business model will disrupt the way “private equity” real estate funds in the U.S. operate and raise capital
The fund manager is focused exclusively on optimizing the value of highly desirable commercial real estate properties which produce current income with attractive returns for rapid portfolio growth and opportunities for investor share value appreciation.
The company will reinvest 90% of its free cash-flow, with leverage, to acquire ever more real estate. By reinvesting its free cash-flow, REICG is compounding and expanding an appreciating asset base, generating greater free cash-flow year after year, on a predictable and programmatic basis.
REICG will grow the value of your equity shares every year by increasing the size of the cash-flow producing portfolio of real estate.
REICG’s business model will grow equity share value in good times & bad.
- in a rising interest rate environment
- in a level and decreasing price environment
- with lower risk, fully stabilized, cash flowing, Class A properties
- with a majority of national and regional tenants
- low vacancy risk, because of pooled property ownership
- with a geographically and tenant diversified portfolio.
REICG’s business model does not offer dividends on equity.
- when the need for investor income arises, opportunity to redeem or trade some shares at the Net Asset Value (NAV) will be provided
- no more 1099s or K-1s, or additional State tax filings
- equity redemption should only be subject to capital gains tax. Therefore Investors keep more
- ideal for Roth IRA, IRA & 401Ks. No UBTI concerns.
Commercial Real Estate Investment Strategy
Niche Segment / “Gap” Properties
Market Diversification and Yield
REICG’s investment strategy involves building a diversified portfolio of high-quality, Class “A”, multi-tenant shopping centers strategically located within the prime retail hubs of secondary markets; markets that benefit from access and proximity to transportation, affluent demographics and strong employment markets.
Properties Within The “GAP”
We target well-positioned assets with purchase prices ranging between $5.0 and $25 million; properties too large for typical individual investors, yet too small for the institutional investors. The decreased competition in this price range provides buying opportunities with higher cap rates. We identified this “GAP” property segment within secondary markets which provide opportunities for higher returns to our investors.
We target properties that have Triple-Net leases and are 90% to 100% leased, while ensuring that no single tenant represents more than 10% of the Fund’s revenue.
The Chacteristics We Look For
Location:
- Generally we prefer one of the “Top Ten States” that we have identified with favorable tax policy for Real Estate Investment.
- We also use the term “Meds & Eds” for locations that are near major medical centers or major universities.
- Class “A” properties – generally refer to the quality of construction. The higher quality properties are generally located in the high demand, better locations, within the local market.
- We do not focus on the “primary” markets, as they tend to be over priced, instead we look to the secondary markets, where higher Cap Rates can still be found.
- The most desired locations within the local market.
- Shadow Anchored centers: They may share the same parking lot with a Wal-Mart, Target, Home Depot, etc.
- Property Type:Retail: Primarily multi-tenant, but will consider Single tenant with long term leases (Currently this is our expertise).Grocery anchored Centers.
Other property types may be considered in the future, as we acquire the expert knowledge.
Leases:
- Triple Net Leases (NNN)
- Absolute Triple Net Leases (NNN)
- Absolute Double Net Leases (NN)
Demographics:
We look for secondary markets where the average annual household income is $75,000 or greater.
Tenants:
- Investment Grade – Credit Tenants
- National Publicly Traded, Corporate Tenants
- National Private Tenants
- Regional Tenants
- National Franchises, with strong franchisee guarantee
- Limited Local Tenants
Limited Local Restaurant Tenants
Generally
- Priced at an 7.0% “in place” Cap Rate or better
- Current rents are at or below market rates
- Properties are near or fully rented
- Lease expiration’s are staggered or spread out
- Current Leases with rent escalations, either annually or every 5 years.