Investing With Sarofim Realty Advisors

  • We emphasize different risk premiums dependent on real estate fundamentals, cycle timing, and client risk/return preferences.
  • We invest across the broad spectrum of risk and return from core through opportunistic strategies.
  • Historically, the firm has invested in Multifamily, Office, Retail, Industrial, and Mixed-Use properties. 

We are constantly refining areas of opportunity based upon the various risk & return parameters.

Investment Vehicles

Sarofim Realty Advisors offers private equity real estate investment for institutions and private investors through separate accounts and commingled funds. 

Separately Managed
Accounts

Discretionary and Nondiscretionary
joint ventures with public and private
institutional investors

New Separately Managed Account Relationships

Sarofim has the capacity to accept new separate account client relationships.  Target strategies will be custom designed around client preferences.  Any new deal conflicts will be managed based upon an industry-standard rotation policy.

Private
Funds

Open-end and closed-end
commingled funds tailored toward
specific investment strategies

Our current investment strategies are:

Opportunistic

MULTIFAMILY New development of “attainable” apartment product geared toward the underserved renter by necessity

INDUSTRIAL
New development of medium bulk warehouse projects in primary and regional markets

VALUE ADD


INDUSTRIAL
Acquisition of small bay in-fill warehouse space built prior to 2000 which requires rent roll stabilization and significant building upgrades

CORE PLUS

MULTIFAMILY Acquisition of functional rental communities requiring minor upgrades to compete with new product and drive future rent growth

INDUSTRIAL
Acquisition of bulk warehouse product with upside driven by below market rents and minor building upgrades

      CORE      



RETAIL
Acquisition of grocery anchored community centers in targeted growth markets


OpportunistIC

Opportunistic: Multifamily Development

New development (with established and well capitalized development partners) of “attainable” multifamily product geared toward the underserved renter by necessity

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Basic
Strategy

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Keys
To Success

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Risk
Mitigators

  • 80% - 100% of Median Household Income
  • Catering to Renters who can’t Afford a Luxury Product or the cost of Single Family Residential
  • Significant Lack of New/Modern Product at the Attainable Price Point
  • Site Selection
  • Efficient Design/Construction
  • Speed of Delivery and Timely Exit
  • Development Cost of New Product— Similar to Class B Renovated Exit Price Expectations
  • Target Rent / Income Ratios of 25% - 30% of MHHI allows for Rental Growth
  • Significant Discount to Luxury Product
  • Construction Cost Guaranty from Premier Developers
  • No Entitlement Risk

Opportunistic

Opportunistic: Industrial Development

New development of industrial buildings in select markets.  Sarofim partners with a network of well-established and well capitalized development partners to execute new development projects. 

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Basic
Strategy

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To Success

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Risk
Mitigators

  • Speculative Development in Select Regional and High Growth Markets
  • Proximity to Transportation Nodes in Regional Markets
  • Necessity to Meet Rapidly Increasing Logistics Demand in Markets with Inadequate Supply of Modern Buildings
  • Cultivating Relationships with Best-in-Class Developers
  • Identifying Niche Opportunities in Markets with Relatively Fewer Capital Sources Competing for Transactions
  • Creating Competitive Advantage Relative to Existing Building Stock
  • Functional Buildings with Flexibility for Multi-Tenant
  • Discount to Tier 1 Markets
  • Competitive Yield on Cost
  • Inferior Existing Competitive Building Stock

Value Add

Value Add: Industrial Acquisitions

Acquisition of existing industrial buildings with opportunities to increase value through strategies such as lease-up of existing vacancy, "roll to market" of existing leasing or moderate physical upgrades or repositioning

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Basic
Strategy

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Keys
To Success

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Risk
Mitigators

  • Capitalize on Fragmented Industrial Market by Aggregating Individual Assets to be Sold as a Portfolio
  • Add Value During Portfolio Aggregation Through Lease-up and Roll to Market Strategies
  • Identify Overlooked Assets in Growing Secondary and Tertiary Markets
  • Targeting Complementary Assets to Create a Homogeneous Portfolio
  • Disciplined and Timely Capital Market Execution
  • Diversify Portfolio Across Multiple Markets
  • Strong Cash-on-Cash Returns During Hold Period Supported by Favorable Debt Markets

Core Plus

Core Plus: Multifamily Acquisitions

Purchase 2005 and newer product requiring relatively minor upgrades ($2,000 -$7,000 per unit renovation) in job creation markets

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Basic
Strategy

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Keys
To Success

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Risk
Mitigators

  • Ability to Increase Rent with Simple Upgrades
  • Well-built Functional Product with Resident Amenities
  • Renter by Necessity
  • Supply Constraints, Non-Urban
  • Solid School District
  • Access to Employment Nodes and Lifestyle Retail
  • Favorable Debt Terms
  • Target 2005 or Newer Product which is Inherently Infill
  • Product is Attractive with a Modern Suite of Resident Amenities
  • Affordable by a Large Population of Renters
  • Stable Operating History

Core Plus

Core Plus: Industrial Acquisitions

Acquisition of industrial buildings to be held for a 5-10 year period.  Buildings will be highly functional with high quality and diversified rent roll.

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Basic
Strategy

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Keys
To Success

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Risk
Mitigators

  • Acquire High Quality Multi-Tenant Industrial Properties in Primary and Regional Markets
  • Realize Return Objectives over a 5-10 Year Hold Through Modest Lease-up, Market Rent Growth and Attractive Financing
  • Disciplined Market and Submarket Selection
  • Identification of Asset with Durable Competitive Advantages
  • Tenant Retention Driven by Proactive Asset Management
  • Strong Cash-on-Cash Returns During Hold Period Supported by Favorable Debt Markets
  • Superior Asset Quality and Functionality Relative to Competition

     

     

     Core     

Core: Retail Acquisitions

Acquisition of grocery anchored retail centers for long term hold.  Properties will have distinct competitive advantages and established anchor tenancy.

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Basic
Strategy

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Keys
To Success

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Risk
Mitigators

  • Primary Grocer in Market
  • Predictable and Sustainable Cash Flow
  • Very Low Risk
  • Site Selection
  • Small Amount of In-line Space
  • Low Vulnerability to Internet type Retailers
  • In-place Leases with Little Turnover Risk
  • Low Cap-ex Exposure
  • Credit Tenants
  • Primary Location
  • Quality Retail Fundamentals
  • High-end Demographics

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