Arcapita’s real estate team acts as a principal, arranger and manager of real estate investments, operating out of its offices in Atlanta, London, Bahrain and Singapore. Its experienced real estate professionals analyze opportunities across a broad spectrum of transaction structures, geographies and return profiles in an effort to provide a diverse mix of attractive real estate investment opportunities to investors. To date, Arcapita has completed real estate investments in the warehousing/logistics, self-storage, senior living, residential, resort, mixed-use, business parks and retail sectors. The team has completed investments across the world; from North America, through Europe, the Middle East and Asia.
In support of Arcapita’s overall business strategy and to provide more diverse investment opportunities for investors, the real estate team at Arcapita extended its focus to develop initiatives which include the establishment and management of real estate investment funds. In addition to real estate funds, the team is also focusing on providing more real estate financial services and solutions by leveraging its experience in specific real estate sectors such as the residential and warehousing sectors where it has executed transactions in excess of $4 billion and $6 billion respectively.
Arcapita’s investment model has been developed and refined over a large number of investments and structures. The process begins with Arcapita sourcing projects from direct approaches made to partners and sellers, and by working with specialist intermediaries within the real estate industry. Arcapita performs project analysis and due diligence in varying degrees on sourced projects. A full investment process typically lasts between two and six months. The real estate team also carefully assesses potential risks associated with the project, from broad macroeconomic trends to more narrowly defined issues specific to the particular project. Arcapita consults closely with its co-investment partners, and reviews extensive analysis of the post-acquisition execution and exit strategies for realizing value over the investment term.
The real estate team typically seeks to exit from investments within three to seven years, depending on the type of investment and the market. Partial or full exit may occur through recapitalization, or private or public sale.
Portfolio Management for Real Estate
Arcapita’s portfolio management approach is designed to ensure the highest possible performance of each of its real estate investments. After closing the transaction, the asset managers, corporate management teams or joint venture partners are directly responsible for the execution of the business plan. Arcapita works closely with these partners to monitor and evaluate the progress of each real estate investment.
Early in the ownership period, the deal team works with its partners to identify the primary operating statistics to be monitored through regular meetings and reports. In this fashion, the deal team is able to apply continuous oversight of each investment. On a bi-monthly or quarterly basis, the deal team receives an asset performance report which includes a comprehensive set of marketing and financial updates for the investment and on an annual basis, the deal team also receives and reviews audited financial statements for every investment.
The deal team also conducts on-site operations reviews on a quarterly basis. At these sessions, the team conducts a deeper assessment of the investment’s performance, working with the operating partner to understand the underlying factors influencing current/future performance. This process helps to ensure early recognition of any performance concerns, and to determine appropriate course corrections, if necessary. More extensive involvement is undertaken as needed.