The key to smart investing is sustainability. At Urban Core Advisors, sustainability is at the core of our investment strategy. Our mission is to provide clients with real estate investment opportunities that provide strong returns that have ‘staying power’ well into the future. When buying or selling commercial real estate in Charleston, South Carolina, our process begins and ends with one theme, ‘sustainability’.
So why is it so important? Let’s consider the current state of investing in real estate in Charleston. Property values are at record highs, vacancy rates continue to decline and rental rates are at levels never seen in this market. This all sounds wonderful, right? Well having worked in commercial banking during the financials crisis, many of these statistics are reminiscent of similar trends just before the bottom fell out. Before you call me ‘Chicken Little’ let me say, NO I am not calling for a replay of the Great Recession. The major drivers of the market meltdown in 2008 were speculation and over leverage. The good news is neither of those are anywhere near the levels they were during the downturn. Actually it is currently the exact opposite. As I have referenced in previous postings, Charleston is experiencing economic growth levels that it has never experienced before. Across every sector of Charleston’s economy we see a constant flow of announcements worthy of front page headlines.
So the good news is we are in a very different place than we were then, but the current state of the market should still give investors reason to take notice. There is plenty of opportunity in the Charleston market which is why many large institutional investors continue to seek out opportunities in our market. As noted by Bryana Mistretta, research coordinator for Colliers International, “Charleston is expected to remain on the national radar for capital placement because of the strong underlying market fundamentals. Although a second tier market, it has an excellent reputation for job growth but high entry barriers and limited land to potentially overbuild.” This speaks volumes for our market, but finding the RIGHT opportunity requires an astute understanding of the Charleston market, the economy and finance to separate the good, the bad and the ugly. As private equity managers and investors ourselves, we have taken notice of these trends and have positioned our strategy to ensure we are acquiring assets that are sustainable and will provide the best returns for our investors.
Having worked for nearly two decades in the financial services industry, and more specifically in commercial real estate, I have experienced multiple economic cycles. It is through my experiences that I have developed an understanding of the need for sustainability and why at Urban Core Advisors, sustainability is and will always be the cornerstone of our investment strategy.
Our investment team does ongoing market research and site analysis to determine the best locations geared towards our investment strategy.
We perform site inspections and consult with general contractors and architects to identify property improvement opportunities and cost estimates.
We do extensive property analysis including underwriting property historical cash flow, three tiered income modeling, future cash flow projections and IRR and cash on cash return profitability models.
Our team underwrites the current tenants and reviews all current lease agreements to determine an appropriate credit grade of the property and identify opportunities for improvement.