All our investments are vetted through a well-defined, rigorous underwriting process and rely on our extensive relationships and deep expertise during each stage of investigation. We create value for our investment partners through strategic efforts to acquire, develop, reposition, and operate real estate.
Our investment strategy is to focus on middle-market transactions with asset values ranging between $15 million and $100 million in targeted U.S. submarkets. We invest at prices below replacement cost, and at attractive going-in yields, to generate excess returns at lower risk. This is based upon our real estate experience through various economic cycles.
Market inefficiencies create property sector opportunity for Ravinia. We focus on industry sectors (such as office, industrial, retail and residential) in which Ravinia professionals have successfully completed transactions and where we have developed operational expertise. Ravinia’s real estate investment goal is to generate a competitive marketing advantage for each asset acquired in order to maximize its profitability during the holding period.
Property Types: Office, Industrial, Residential, Retail
Investment Size: $15-$100 million for Individual Assets, up to $500 million for Portfolio Investment
Geographic Locations: Targeted U.S. submarkets with attractive real estate investment characteristics where Ravinia has established local experience and relationships
Investment Structure: Direct Investment, Co-Investment Joint Venture, Majority Investment, Preferred Equity and Distressed Debt
Sourcing Investment Opportunities
Investment opportunities are sourced from the real estate professional community (representing national, regional and local brokerage firms), private and public real estate owners, the investment banking community, institutional ownership (represented by insurance companies, pension funds and banks and bank trustees) and others. Other transaction sources also include professional service firms (such as law firms, accounting firms and title companies) and leads generated internally through our professionals.
The principals of Ravinia have completed multiple transactions with various institutional and private real estate investors, each with a different investment objective. Our strategic partners, representing investment firms and high net worth investors that have invested alongside Ravinia, provide both capital relationships as well as sources of new transaction flow. These relationships extend over a decade and remain a source of repeat business.
Ravinia does extensive econometric research to identify which investment target markets will deliver the highest risk-adjusted return. This includes cross-referencing real estate supply and demand characteristics with employment and income growth characteristics. We couple this economic research with our local experience in these markets and invest in property markets that consistently remain attractive to the institutional investor as well as the private investor. These market factors magnify the probability that numerous exit strategies exist for our investments.
Ravinia undertakes an extremely disciplined investment process in order to generate additional Alpha while minimizing risk. Ravinia also “sizes” our investment in the local market in order to maintain risk diversification. We never over-allocate investment dollars to smaller markets, for example.
Preliminary Financial Analysis and Review
Once an investment opportunity has been identified for review, Ravinia develops a thorough financial underwriting and sensitivity analysis that includes pro forma cash flow, capital expenditure budget, various investment hold periods, and a range of exit values. Ravinia's professionals also speak with industry experts to gather preliminary due diligence such as market and property information and formulate investment/exit strategies.
Once Ravinia executes a sales contract to acquire the real estate, we review, verify and analyze all financial and accounting information. The due diligence information that is generated serves a dual purpose; to be utilized by the acquisitions team and eventually by management during the ownership transition period.
Ravinia also conducts comprehensive lease reviews which are abstracted and audited against the seller’s property-level rent rolls. Third-party engineers and environmental firms are also engaged to provide independent confirmation of property information to satisfy mortgage lenders and investors. The transaction closing typically occurs 30-60 days from the end of a contractual due diligence period.
Optimizing Financial Leverage
Ravinia constantly reviews its ability to refinance and rebalance our real estate investment portfolio with more flexible or lower cost financing. We attempt to match-fund the maturity of any debt financing with our value-improvement strategy. To the extent we can improve the real estate investment’s performance in the short term; we will initially finance the property with short-term, pre-payable debt, only to refinance with longer term debt once our property financial objectives have been achieved.
Ravinia endeavors to increase value post investment as part of our strategy. Examples include introducing non-traditional sources of revenue, developing a new marketing or branding strategy or identifying a strategic relationship that helps our investment property. We believe our experience within the real estate industry generates a significant advantage in executing our investment strategy.
As a hands-on asset manager, Ravinia works side-by-side with the best local property management and leasing teams to execute the investment strategy and maximize the value of our investment. Ravinia schedules regular calls with its property management and leasing teams and conducts property visits to review, approve and discuss each property's leasing options and operational performance. Ravinia conducts formal quarterly investment reviews of all real estate assets under management and follows a conservative budgeting process from the investment’s inception.
The projected hold period is typically three to five years; however, it may vary depending on the type of investment.
The market remains very liquid and depending on the investment type, there may be private and public company exit strategies. While the REITS (both public and private) have been a prevalent buyer of institutional quality real estate assets, other buyers such as pension funds, offshore institutions, hedge funds, and other private buyers have also stepped in to purchase real estate.