- Why invest in Commercial Real Estate?
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Investing in commercial real estate can offer clients multiple benefits including:
Cash flow from the ongoing operations of the property(s)
Use as a tax shelter generated by property (either from a property’s
cash flow as well as some of the gain when a property is sold)
Diversifying your investment portfolio of financial holdings
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- What are the advantages of real estate vs. other investment options?
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Tangibility
Low risk
Investment leverage
Broad asset class
Strong returns
Inflation hedge
Preferential tax advantages
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- What and where are the best real estate investment opportunities?
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Investment opportunities and their fitness to individual clients can vary. The search for the best property or properties to start or enhance your real estate portfolio includes several factors including but not limited to geographic location, property type, and value, as well as an understanding of your particular tolerance for risk. WelshInvest’s associates have in depth knowledge and market information to assist in the comparison of investment opportunities to help you find the best opportunities to diversify your portfolio.
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- Who is Welsh?
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Welsh is a full-service commercial real estate company, established in 1977, providing services to clients throughout the United States. The Welsh organization consists of more than 300 professionals whose expertise extends into virtually every aspect of commercial real estate including office, industrial and retail brokerage, corporate services, asset and property management, facility management, construction, architecture, development, mortgage banking and investment services. Welsh is headquartered in the Twin Cities with regional offices in Minneapolis and Saint Paul, Minnesota; St. Louis, Missouri; Chicago, Illinois, and Detroit, Michigan. Of the 300 Welsh employees, over 25 individuals are dedicated to WelshInvest. These individuals comprise the acquisitions, due diligence, asset management, legal, development, financial analysis, financing, and investor relations staff.
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- What is WelshInvest’s Investment Strategy?
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The investment strategy of WelshInvest focuses on real estate opportunities that, through value enhancement and financial structuring, provide superior risk-adjusted returns on invested capital over a medium-term investment life.
When partnering with institutions or individual investors, Welsh principals and senior executives provide a portion of the equity needed for acquisition as a show of good faith and a testament to Welsh’s confidence in the quality of the investment.
WelshInvest specifically targets investments that:
Provide a strong annual cash flow, but also demonstrate strong prospects
for value creation;
Are being sold at a discount to the replacement cost;
Are portfolios from which component properties can be sold individually
to maximize returns;
Provide attractive development projects;
Are joint ventures with institutions; or
Are an opportunity to provide higher-yield mezzanine financing to
companies owning real estate assets.
Small-Cap Focus: As a vast amount of institutional capital continues to enter the real estate market, there is a greater need to deploy larger amounts of money on single transactions. WelshInvest frequently focuses on small-cap opportunities ($75 million or less) that, due to the size, traditionally do not attract larger institutional buyers. The small-cap strategy is to acquire well-located and functional assets that are priced at a discount to replacement cost, or may require an extensive capital initiative. These small, management-intensive properties usually require significant hands-on management that institutional buyers shy away from. With this approach, WelshInvest hopes to avoid competing with numerous buyers, whose presence often leads to higher pricing.
Portfolio Acquisitions: With an extensive pipeline of product available to purchase, an increasing number of assets available for purchase are portfolios. WelshInvest will focus on portfolio opportunities where value can be added by purchasing the portfolio at a lower cost than the aggregate price of the individual buildings if purchased separately. In many cases, a focused operating approach can create efficiencies not available on single assets. By purchasing in bulk and selling at retail pricing, significant opportunities exist for value enhancement.
Leverage: WelshInvest seeks to obtain financing for purchased properties to enhance return by obtaining positive leverage positions. Typically, the loan to cost ratio on any particular acquisition will range from 70-77% based on the risk parameters of the investment.
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- What is WelshInvest’s Operational Strategy?
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Welsh has demonstrated a history of creating value for investors through acquiring office, industrial and retail portfolios, under-valued properties, establishing partnerships with major institutions, and developing properties throughout the country. A key component of value creation is the in-house asset management expertise of Welsh. The asset management group will be responsible for executing the investment strategies of the Company for all of the assets acquired. From the initial stages of an acquisition and due diligence, the asset management group is incorporated to provide expertise and ensure correct lease collections and operating expense billings, and to facilitate outstanding tenant relations. Upon acquisition of an asset, the asset management team works closely with property management, accountants, and leasing brokers in executing both leasing and capital improvement plans to obtain the returns projected for the asset upon acquisition. Additionally, the asset management team will manage the property inspections, valuations, capital improvement plans, annual business plans and dispositions.
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- How do investors find out more about WelshInvest?
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Investors can receive additional information on WelshInvest including current and future opportunities by going to the Request Information Link on this website. An investor relations associate would be happy to send out additional literature or discuss investment options.
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