Rose Smart Growth
Investment Fund I, L.P.
|
Economic
Strategy
The Fund was formed to create long-term value for high net-worth
individuals, foundations, trusts, and institutional endowments. Our
focus is on capital preservation, current cash flow and future
appreciation. Leveraging $100 million in equity, we plan to purchase
approximately $300 million of real estate.
We begin by focusing on current cash flow, which is an excellent
indicator of a healthy project. We then seek to increase income, and
thus overall value, through environmentally responsible asset
management practices. The Fund targets a 12–15% internal rate of return
for our investors over a ten year period. For taxable investors, the
Fund’s returns are additionally enhanced by depreciation.
The strategy is based on six principles:
- The Fund’s investment strategy is
conservative, with a primary focus on the acquisition of existing, cash
flowing properties.
- We seek buildings in markets that are
improving and have excellent long-term prospects. Our risk management
strategy is enhanced by product type and locational diversity.
- Transit-based and walkable locations
reduce reliance on the automobile, and are clearly the most
environmentally responsible. At the same time, the rate of increase of
rents and values are typically higher in these locations.
- The Fund makes prudent investments in the
greening of its assets to reduce environmental impacts, reduce
operating expenses, and enhance long-term value.
- We believe that over the next ten years,
an all green, cash-flowing, transit-based or walkable portfolio will
out perform a portfolio of sprawl-located buildings.
- Holding real estate for the long-term is
a key generator of wealth creation.
Assembling a portfolio of green real estate assets now will provide a
competitive financial advantage as the market begins to differentiate
between economic values for green and non-green buildings. This
differentiation in value will arise from the fact that non-green assets
cost more to operate, and increasingly, we are seeing the market prefer
green buildings. Green buildings in smart growth locations respond
better to volatility in energy prices, not only because of operational
efficiency at the building level, but also because of greater ease of
access for tenants and consumers when fuel costs are high. Therefore,
our strategy provides better tenant attraction and retention, a
stronger top line, reduced operating costs, and increased NOI and value.
Over the past 14 years we have brought investors into seven individual
acquisition partnerships. We achieved a blended IRR of 24% and have
never lost a single investor dollar.
|
 |
|
|
|
