Investments

Adler R.E. Partners invests through Funds,

Managed Accounts and individual asset Joint Ventures.

Adler R.E. Partners' Investment philosophy is to focus on

capital preservation, cash flow and value creation:

Acquire properties well below replacement costs with what it believes to be appropriate leverage.

Seek strong average cash flow to generate significant returns through operations

Implement value-add strategies, which are not dependent upon significant rate and asset value growth, to achieve strong residual values.

Adler R.E. Partners’ targeted asset class, multi-tenant commercial office and industrial buildings, have generally outperformed other types of office and industrial properties achieving favorable risk-adjusted returns

From 1983 to 2008 flex/industrial properties returned 9.54% while warehouse properties returned 9.38% and central business district office properties returned 8.41%.

A reason for this outperformance is that multi-tenant business parks and industrial facilities generally feature smaller tenants and shorter lease terms.+ See more

The pool of potential tenants is larger suggesting higher demand and shorter lease-up times.
Shorter lease terms allow for more frequent adjustment of rents to market rates, thus indexed to inflation.
Risk of tenant non-performance diversified across multiple tenants.
Tenant improvement and leasing commissions are traditionally low – new paint and clean carpet is generally enough to ready a vacant space.

Properties in this asset class are trading at historically high capitalization rates in part due to the management intensive nature of such properties. Adler’s history of operating expertise within this asset class position it well to acquire these properties at high cap rates, add value through expert management and exploit the currently wide spread between cap rates and interest rates.

Sources:
Federal Reserve H.15 July 12, 2012
CBRE Cap Rate Survey Aug 2012