investment Overview
Strategy and Process Focused on Value
Penwood offers risk-managed strategies to accommodate the value-added real estate allocation of institutional investors. We structure value-creation strategies in individual or commingled fund formats for the institutional investor market. Our goal is to achieve above-market returns while minimizing risk.
High-level investor service—rooted in informed and responsive communication—is a hallmark of our firm. Our principals meet personally with investors to review fund performance, provide insight into investment decisions and interpret market trends. We provide investors with detailed quarterly and annual reports detailing the performance and status of each fund, client-level financial information and special updates summarizing property acquisitions and portfolio information.
Value Add Returns
To find the right investments, we typically work with local operating partners in an “off-market” situation, rather than via an open-market, broker-directed bidding process. By delivering properties at cost or buying below replacement cost, our partnerships establish a value-added margin designed to deliver above-market returns.
Incremental Risk Strategies
Penwood uses its deal structuring and risk management expertise to effectively manage incremental risk in its funds. Here’s how we do it:
- Minimize pre-development risk by investing only in appropriately zoned land.
- Limit construction risk by actively value-engineering construction costs and by obtaining guarantees from the development partner and/or general contractor for the final cost of the building shell and the timely delivery of the product.
- Manage real estate market risk by focusing our expertise on maximizing income and assessing the impact of each component of our value-add strategy on capitalization rates and property values.
