WE INVEST IN THREE PRIMARY CATAGORIES

Investor Understanding Of Our Thematic Investments

Our investors are accredited investors with varied objectives, risk tolerances, and investment horizons. Our organization focuses on value-add, core plus, and core. These catagories describe the risk, quality, and strategy of an asset in the broader context of the business.

Value-add Investing

Typically, value-add investing is considered to have moderate risk and considerable upside potential. We acquire B- or B value-add apartments and take them up to B+ or A- quality. These properties are usually held 3 to 5 years.

These communities are economically stabilized but certain aspects of a property or its operations, may cause a drag on optimal value. We fix issues such as poor management, outdated physical structures and apartment units, improve amenities, and re-tenant to maximize value. Our value-add investors generally want to see between 13% to 15% annual returns. In most cases we use 65-70% leverage at purchase.

Core Plus Investing

Core plus assets are newer properties, say 2010 or newer, and located in exceptional locations. We purchase these properties at lower cap rates than value-add product and benefit from high-quality tenants, and stabilized cash flow. We use lower leverage than our value-add assets. Our core plus properties are held for longer terms—5 to 10 years.

Cash flow in a core plus property might be more variable and typically has less upside than a value-add asset. Investors in core plus properties expect a 9% to 13% annualized return. Leverage is typically 60-65%. Investors like this product type especially for portfolio growth.

Core Investing

The term “core” refers to apartment communities located in irreplaceable locations with the highest-quality tenant profile. These properties are purchased with low leverage debt, say 40-50% or less. Investors like to compare these types of equity investments to bond investments 7%-10% annual returns with little variability.

While RH Capital Partners focuses on value-add and core plus opportunities, certain HNW and Ultra investors wish to invest in the class for long term hold and portfolio growth. In these cases, our firm has the capability to source, underwrite and acquire qualified core assets for our investors, and manage.

Our Investment Thesis

We focus on population and employment metrics, including growth rates, household formations and incomes, age brackets, diversity of the workforce, and employers to name a few.
Our team concentrates on acquiring in supply constrained markets with high barriers to entry. Assets in markets with highly rated schools, low crime rates, and access to transportation and employment.
We like well-constructed assets with limited to no functional obsolescence and a preference for unique features, including high quality amenities.
Our thesis favors the acquisition of existing in place, Class B value-add or Core-plus communities, which provide stable cash flows and superior economics above the sector mean.
The RH investment team seeks to understand the complete story behind an offering, enabling us to uncover hidden upside and create innovative value add strategies.
Thinking out of the box, we understand and recognize situational opportunities that can be aligned with specific investor objectives and respective thresholds of risk.
We underwrite utilizing a proprietary and comprehensive model to fully understand the economics of any potential transaction, including risk and reward.
Our ultimate objective is the provide high market risk adjusted returns to our investors.
Above all else, assure for the preservation of invested capital.

We focus on institutional quality investments—50 to 400 unit communities described as quality value-add and core plus assets. This sizing maximizes our economies of scale, enables our integrated management services to add value, and ultimately produces higher and more significant returns to our investors.

Our Investment Philosophy

GROWTH
Focus on population, employment, and growth metrics.
VALUE
Underwrite conservatively. Drive value fundamentals agressively.
HIGH YIELD
Seek highest yields with risk adjustments to meet client thresholds.
PRESERVE CAPITAL
Above all else, preserve capital investment.
DIVERSIFY
Exploit opportunities by class, across geographic boundries and capital lines.
INTELLIGENCE
Utililize research and market intelligence in investment decisions.
CAPITAL SOLUTIONS
Deliver dynamic capital solutions at every conceivable juncture.
ASSET MANAGEMENT
Drive income. Operate efficiently. Engage in superior management practices.

RH Capital Menu

  • DIRECT INVESTMENTS     General and Limited Partnerships, Separate Accounts

  • ACCOUNT MANAGEMENT     Accounting, Reporting, and Audit

  • FINANCIAL SERVICES     Advisory, Assessment, Risk, and Underwriting

  • MANAGEMENT SERVICES    Property, Asset, and Portfolio Management

  • FACILITATION     Alternative Reinvestment, 1031 Trade Facilitation

© RH Capital Partners, Private Wealth. A RedHill Realty Investment Management Company.

12230 El Camino Real, Suite 340, San Diego, CA 92130  /  Tel: 858.350.1800  /  Email: [protected]