Olshan Properties’ strategy for the acquisition of stabilized real estate assets is based on two simple factors:
The current performance of the property
The future potential value for the property
At the highest level of quality, properties can be regarded as “A” grade. That is, the fundamentals behind both the market and the property itself are extremely sound and contain the lowest long-term risk. However, all properties can be positively affected by active management. As such our strategy for A-grade assets is called “Top-Grading”, whereby the smallest details of a property’s operations are constantly measured, improved and re-evaluated. Small reductions in expenses, incremental rent increases, tax abatements and improvement in credit quality are constantly in progress. The result of Top-Grading is not necessarily a material increased cash flow, but rather realizing value through valuation, multiple expansion, exponentially increasing the value of each dollar of net income and ultimately the value of the project at sale.
Properties with strong fundamentals but room for meaningful cash flow improvement can be given a “B” grade. These investments carry little down-side risk but have a greater upside potential through meaningful increases in net income. This strategy for B-grade assets is called “Up-Grading”.
Our expertise in high-barrier-to-entry markets gives us insight into up-grading candidates. Nearly all of these assets will require additional capital to invest in the project to ensure its long-term value is improved. The critical part of our investment program continues to be diligent fundamental underwriting in markets where we have a proven expertise.
Our experienced acquisitions team, combined with our time-proven operations platform, has given us a historical advantage for long-term value creation.