Abacus Capital generally targets high quality or otherwise irreplaceable assets with lower risk profiles where that risk might be mis-priced or otherwise misunderstood.
We strive to identify inefficiencies or dislocations in the real estate capital markets that generate asymmetric return profiles, often characterized by downside protection through attractive going-in bases or current income.
At various points in a market cycle we will typically focus on investing client capital either offensively or defensively.
However, special situations may arise on an episodic basis where we believe a particular offensive investment opportunity may make strategic sense on a risk-adjusted basis in an otherwise defensive investing environment.
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Defensive Asset Investing
- Characterized by income & growth
- Attractive cash flow profile
- Durable in-place income
- Low maintenance capex profile
- Going-in basis below replacement cost
- Irreplaceable locations
- Infill assets with long term redevelopment/re-use potential
- Growth markets (GDP, population, demographics)
- Attractive supply/demand fundamentals
- Yield premiums not reflective of relative values
- Undercapitalized asset classes or investment strategies
Offensive Asset Investing
- Characterized by capital appreciation
- Development / re-development in undersupplied markets
- Asset enhancement through strategic capital improvements that drive top line growth
- Lease-up of under-occupied buildings to market levels
- Reposition of existing asset use / positioning amongst its peer set
- Marking in-place rental rates to market levels upon lease rollover
- Front-running transitional micro-markets
- Land development and/or land banking