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Principal Investment Strategies Maximizing Asset Potential
Our goal is to maximize each and every investment through strategic rental and development opportunities. At present, several Chicagoland areas offer strong rental opportunities with negligible vacancy rates. These same areas have experienced the first wave of gentrifying development, but many of the more established developers have ceased activity in anticipation of the recent slowdown. While current market economics dictated this development lull, Villa Capital strives to prepare properties for future dynamics that will provide the greatest return to investors.
Multi-Unit Residential
Our firm aims to acquire long-term property investments - over a five to ten year investment horizon - in well-leased assets. These investments are generally located in either mature or emerging neighborhoods and include multi-unit (i.e. 20 - 250 units) properties with the potential for refurbishment or other value-add features such as upgrading, small scale development and strategic repositioning with a view to maximize capital growth and investor returns. In addition to the above value-add activities, Villa Capital intends to maintain a high occupancy rate and control expenses by capitalizing on the economies of scale inherent in owning, operating and growing a large portfolio. Furthermore, we believe that the previously mentioned trends and opportunities, along with an increasingly limited supply of rental units, further positions Villa Capital and its investors to successfully realize the multi-unit residential strategy, capitalizing on the anticipated effects of occupancy rates (higher), landlord concessions (lower) and rental rates (higher).
Commercial Real Estate
Villa Capital actively seeks multi-unit commercial property investments in high-traffic areas with credit worthy tenants. We will derive the maximum return by employing various strategies to procure the highest quality tenants, while improving the use of each commercial space within the property. By leveraging our relationships with reliable and sound tenants and responding to their leasing needs, Villa Capital is able to reach the pro-forma projections of an investment within 12 - 18 months post-acquisition. Primarily, these investments will reside in established and growing communities throughout the United States. Additionally, Villa Capital seeks vacant land in developing areas for conversion to commercial use. These investments are typically a longer-term hold, but offer various lucrative exit strategies, including customized construction of commercial space for potential tenants.
Property Development
Villa Capital strives for property development investments of 9 - 24 months in duration. We have the in-house expertise to create value through construction/conversion and management of the investments. The strategy is to convert currently owned multi-unit properties into condominium ownership when the sale of the asset as an income producing property no longer provides the greatest return. Income producing properties inherently reach a 'glass ceiling' in value, due to the decreasing cap rate that a prospective buyer would inherit. Our firm will utilize the property development strategy to generate the greatest possible value in each specific investment.
Exit Strategy
Villa Capital will sell an asset if it determines that:
- its investment objectives have been reached
- better opportunities are available
- its investment objectives are not being met
We plan to market specific assets to private and institutional investors, leveraging our institutional sales expertise to capture the highest possible sales price. This expertise includes the ability to package and sell multiple assets as a real estate portfolio, or individually, through a comprehensive ‘investment book,' outlining historical property financials, independent property valuations, an inventory of asset improvements, performance ratios (i.e., capitalization rates), tenant roster and market and trend analyses. The development of an 'investment book' is more prevalent in the institutional-grade commercial real estate brokerage industry. By bringing this institutional sophistication to the 'small cap' residential and commercial real estate market, Villa Capital further positions each asset to realize its investment objectives. |
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