Our Strategy is Our Difference
Private Equity Real Estate Strategy
PERI Capital Group’s private equity real estate strategy is simple: minimize our client’s risk by co-investing with sponsors that have proven track records of long-term success. We are opportunistic investors by nature and tend to focus on allocating capital during periods of distress. We believe it is during these times that opportunities present themselves with the greatest discount and the most upside potential with meaningful repositioning efforts.
Our targeted investments include private equity lower-middle market corporate acquisitions, alternative investments such as corporate debt and commercial real estate. Our real estate pursuits tend to be our main strategy with a focus on value-add and opportunistic acquisitions but will consider core depending on the nature and upside. Our value-add and opportunistic investments focus on properties that are operating with very little to no income but have tremendous upside potential if operated in the right hands with the right strategy.
Our partnerships are structured such that our investors participate in both the equitable share of distributable income, as well as any upside potential upon sale and disposition.
These structures are negotiated on a deal-by-deal basis and typically include a preferred return, a return of original invested capital and a promote split structure thereafter.
How Investors Make Money
Our investors make money three ways: quarterly cash flow, equity build-up and asset appreciation.
Once a property is acquired, PERI receives quarterly distributions from operations. What makes us different from most is that we subordinate our returns until our investors have received a predetermined return on their investment. We structure each investment with our clients in mind. They take priority in all revenue distributions until they have received a specified preferred return, plus a return of their original investment. Only then can PERI participate in the remaining profits. And in most cases, we split remaining profits with our investors 90|10 (90% to investors, 10% to PERI).
100% of all Revenue
Goes to investor until they receive a preferred return
100% of all Revenue
Goes to investor until they receive original investment back
90/10 Split
90% goes to PERI’s investors
What We Invest In
Core – Income-Producing Properties
Stabilized income-producing properties provide a steady income stream and are generally considered to be lower risk. Targeted properties are substantially fully leased and carry an estimated 3 to 5-year investment hold. Acquisitions of such properties offer an average 8% – 12% annualized quarterly income stream with the opportunity for additional return through property appreciation at sale or refinance.
Value-add Projects
We seek to acquire undervalued properties and increase their performance through repositioning efforts and effective management practices. These opportunities may include hospitality, office, mixed-use retail, medical, and multi-family apartment communities. Through the implementation of a detailed redevelopment, realignment, operating and exit strategy, annual project returns range are targeted between 18-20%.
Opportunistic Projects
These investments are typically distressed situations that are producing very little (if any) cash flow due to mismanagement or significant deferred maintenance. These distressed opportunities present the potential for significant upside if they are well locate within their respective marketplace. These projects generally have a targeted investment hold of 5-7 years and are expected to generate annual project returns from 20% – 30%.
Ground-up Development
We partner with experienced developers to build high quality retail, office, industrial and hospitality projects. New development projects generally have a targeted investment hold of 2-3 years and are expected to generate annual project returns from 18%-25%.
Private Equity
We seek co-investment opportunities with family offices that have experience in lower-middle market acquisitions and alternative investments such as distressed credit/debt instruments. Although we tend to be more opportunistic in nature, for M&A, our focus tends to be less so by participating in the acquisitions of companies that have strong market position and/or historical financial performance. These investments generally target a 7 to 10-year hold and have a targeted return of 20-30%+.
