ATCAP Partners provides offerings and expertise in a full complement of real estate investment products and services. Strategy is executed through a strong asset management foundation, which is the primary directive of the Company. The firm currently focuses on two specific strategies in the risk/reward spectrum in the central and southern United States: Core-plus and Value-add.
Core-plus
This strategy incorporates a value add or enhancement component to the core property strategy, providing higher yields when compared to core investments. These investments require a sound business plan with the right operational team to provide results.
Value-add
This strategy involves properties that require some physical improvement and/or exhibit management or operational problems often due to bad business plans, under allocated staff or capital constraints. Our hands-on entrepreneurial approach provides the resources necessary to capitalize on this strategy and provide exceptional yields.
Our Philosophy
ATCAP Partners employs a disciplined approach to its investment philosophy, which is focused on generating a relatively high current cash on cash yield with upside potential resulting in desirable risk-adjusted returns and multiples.
ATCAP understands the potential advantages associated with middle market assets. In order to turn opportunity into success in this product, we must remain acutely focused on the following areas.
Have a Sound Hedge Against Inflation
With very few exceptions, private real estate performance has remained highly correlated to the Consumer Price Index (CPI) over the past 30 years, making it a good inflation hedge across long periods of time. The exceptions, and they are usually predictable, typically occur when real estate prices overheat as they did in the early 1990s and 2007.
Ensure Institutional Quality
The ultimate objective for any acquisition in today’s market should be to obtain institutional-quality product. Middle market properties receiving financing must be of institutional quality or the strategy must be to improve it to institutional standards. Typically our acquisitions are derived from institutional owners, who have spent a large amount of capital over time to optimize the product for the submarket leasing conditions.
Know the Market
One of the primary challenges associated with middle market transactions is finding reliable market information, as few research groups pay detailed attention to them. Succeeding in the subject markets requires a deep understanding of the various intricacies and strong local relationships. ATCAP has the on-ground relationships that result in distinct underwriting advantages to competitors. We work with the best leasing and tenant reps to extrapolate our market assumptions in modeling.
Prepare For Challenges
Despite the opportunities available, the economic market remains in disorder. The best way to mitigate volatility is to keep leverage levels in check and have capital reserves to ensure that if there is a misstep in the market or execution, the assets are in a safe position.
Utilize Strong Fundamentals
The most important facet in ATCAP’s acquisition strategy is strong fundamentals. Fundamentals should always dictate strategy over relying upon financial engineering and compressing capitalization rates. Our target product is shallow bay industrial with low office finish. This particular product serves the market and region that they are located in. With a diverse mix of tenants serving a specific market, the fundamentals are in place for a stabilized portfolio. The main difference between us and the groups we are buying from (institutions) is our hands on entrepreneurial approach which is results driven; not bureaucratically derived.
