TREC Investment Realty - Investment Strategy

At TREC Investment Realty, our investment strategy is simple—

We acquire high-quality, high curb-appeal properties
that are most likely to produce stable cashflow and future appreciation.

Here are some of the important factors that we evaluate and consider...


	Our TIC Properties generally have a purchase price that ranges from $10,000,000 up to $40,000,000, with the minimum investment for an individual TIC owner starting as low as $250,000.

	While the actual purchase price is very important, we consider numerous additional factors when “buying right.” The quality of tenants, stability of rents, potential for rent increases, and occupancy rates are all carefully considered. We believe “buying right” involves selectivity. We analyze a great multitude of properties before offering the best investment opportunity to our co-owners.

	First and foremost, we are "yield" buyers, but only in markets which we find to be growth- or appreciation-oriented. This focus has caused us to concentrate mainly on newer office and retail properties.

	The targeted first year cash-on-cash returns are 6-9%, given current market conditions, and may include interest-only financing for all or part of the loan term. Existing rent escalations and projected market rent increases are evaluated when determining if, and for how long, interest-only financing will be used.

	Properties are typically financed with a LTV ratio of between 60-75%. This range allows for reduced risk compared to maximum leverage while still supporting the targeted cash-on-cash returns. With LTV ratios up to 75%, our properties have the replacement debt required by the IRS for those TIC buyers who are completing an IRS § 1031 exchange. Furthermore, the use of leverage can increase the amount of allowable depreciation and overall return on investment.

	Although the holding period may vary greatly from one property to another, the anticipated average holding period is between five and eight years. During this period, potential appreciation is maximized through increasing rents, decreasing vacancy and quality property management. In addition, continued growth of the local market could contribute significantly to the overall appreciation. The holding period is based on an evaluation of various factors including the length of the financing term. It is important to remember that the decision to sell a property is made by the Tenant-In-Common (TIC) owners of that property, not by the sponsor.