commercial real estate investing strategy

What We’ve Learned In 25 Years Of Investing In Commercial Real Estate

We know that you have options for investing your money in commercial real estate. What sets us apart from our competitors is our investment strategies and our partnership mindset:

  • Our investment strategies center around tier 1 cities, where we have deep experience navigating the regulatory and permitting hurdles that keep many competitors out. 
  • As a smaller shop, we recognize the outsized influence that our leadership team has on the firm’s reputation. We strive to treat our investors, customers, and vendors with the same empathy and integrity that we desire from others. We recognize that Commercial Real Estate is a team sport. It takes the effort and resources of many individuals to execute on the wealth-building strategies we pursue in our day to day work at Mason Equity Partners. 

After 25 years in the biz, here are a few of our favored strategies for investing in CRE:

  • Build to Core: We like Core Markets (SF, LA, NYC, etc) due to their supply constraints and regulatory barriers to entry. We believe core markets are less prone to overbuilding and have more stable demand compared to boom/bust suburban and rural markets. We prefer to build rather than buy, because developments achieve higher yields and we have the experience to navigate the added risks. We focus on projects where we can achieve a  30% or larger gross margins and we aim to sell or refinance our projects upon completion or stabilization. Development typically takes 5+ years, and we strive to build well-located projects with sufficient reserves so that we can survive whatever economic conditions may exist when we deliver.
  • Value Add Conversion: There are an increasing number of buildings that are defaulting on their loans and being given back to their lenders, where the property can generate more income if it is converted to a higher value use. WE believe many of these properties are located in strong self-storage marekts and we are actively studying the feasibility of converting them to self-storage. 
  • Sub-institutional Existing Assets: We supplement our build to core program with acquisitions of existing cashflowing assets located in secondary markets within a reasonable driving distance of our large scale core developments. We like purchasing small properties because they attract fewer institutional buyers and because they are difficult to operate without portfolio economies of scale.  We add value by building additional square footage, streamlining operations, and raising rent. Acquiring secondary locations allow us to rapidly grow our brand while driving property management efficiencies across the portfolio.

If you like what you read, we have two types of offerings open to potential investors. Our minimum investment is $100k.

    • Limited Partner Interests (Target Returns: 6% – 20% net of fees): We offer LP interests in “shovel-ready” development projects and existing storage acquisitions. A development project becomes shovel-ready when all permits and approvals are in hand and a general contractor is ready to start construction imminently. Developments offer higher returns, but take longer to turn profits and have more risk. LPs pay a fee (“promote”) to the General Partner that scales based on how well their investment performs – the more money the LPs make, the higher the promote the General Partner receives. LPs do not fund diligence costs, contract deposits, or early-stage design and approval expenses. These are all paid for by the General Partner and Co-General Partners (“Co-GPs”)
    • Co General Partner Interests (Target Returns: 20% and up, net of fees) :  We offer Co-GP interests in early stage development projects and existing storage acquisitions. Co-GPs invest alongside the general partner to fund costs related to contract deposits, due diligence, design, and regulatory approvals. In return for incurring additional risk, Co-GPs can earn a share of the promote and other sponsor fees, resulting in returns that can be much higher than what LPs receive.

Ready to Invest?

Whether you are an accredited investor or just getting started on your investment journey, we welcome you to subscribe to our newsletter for updates and opportunities to co-invest with us. Our investment opportunities are not frequent – so we don’t spam – but by the time they are presented to you, they will have already been through our extremely rigorous selection process. All investors are welcome to join our Investors’ Circle for a listing of past, current, and future offerings. 

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