Attractive Risk-Adjusted Returns through Strategic Investments

The Fund seeks to generate attractive risk-adjusted returns through real estate investments. This strategy is executed by combining sophisticated capital market and investment expertise with extensive asset management, operating capabilities and experience.

Recognizing and Responding Quickly to Capital Flow Cycles

Real estate is a cyclical business with its cycles determined, in large part, by capital flows. A sound investment strategy must recognize the importance of these cycles and requires a commitment to maintain pricing discipline when buying and a willingness and an ability to move quickly to sell when the value enhancement program has been completed and the markets are fully valuing asset and market fundamentals.

Utilizing Debt Appropriately

The Fund believes leverage should be used at a level that provides a meaningful enhancement to investment returns, but not be so high that a fundamentally sound asset will be put at risk during periods when rental markets soften or capital markets become constrained.

Mitigating Risk through Asset Quality and Tenant Service

In selecting investment opportunities, careful assessment must be made of the risk profile of the various alternatives. In rental real estate, risk comes in basically two forms: rental rate risk and vacancy risk, with the greatest investment risk coming from the substantial costs that are incurred through vacancy. The Fund believes that both of these risks are best mitigated by investing in properties that, due to their location, physical quality, amenities and other attributes, will always be preferred locations. These risks are then further mitigated by operating these properties with an unwavering focus on responsive and cost-effective service to tenants so that opportunities to expand and retain tenants on the most favorable terms are maximized.

Risk Control

The Fund will control the risk on its investments by various means, including structuring transactions to protect value in downside scenarios, and developing multiple exit strategies. The Fund will make every effort to avoid situations where uncontrollable factors or adverse market conditions might result in total loss of the investment.

Consistency of Returns

The Fund has a strong preference for a portfolio that has a larger percentage of successful investments as opposed to a scenario where a few highly successful investments make up for a large number of poor performers. The Fund’s investment strategy is designed to yield a high number of singles and doubles rather than a few home runs.

Underwriting and Price Discipline

The General Partner follows a tightly controlled and managed process to examine all elements of a potential investment, including its location, income-producing capacity, prospects for long-range appreciation, income tax considerations and multiple exit scenarios. Only those real estate assets meeting the investment criteria will be accepted for inclusion in the portfolio.