What We Do
“Visionary companies use the genius of the AND—experimenting and developing—while still adhering to the core ideology.”
– Jim Collins, Good to Great
what we do
We Invest in Industrial Parks and Apartments in Inefficient Secondary and Tertiary Markets
Graceada Partners has a vertically integrated team of 75+ professionals focused on creating value in industrial parks and apartment real estate.
Industrial parks and apartments are two of the most recession and inflation resistant asset types. Secondary and tertiary markets are perhaps the last large non-institutional segments of real estate. With $1.6 trillion of apartment and industrial real estate in secondary and tertiary markets, this is a large, mature, and inefficient market.
Our Process
Focus on Attractive Markets
Long-term population growth
Relative affordability
Supply-constrained
Quality of life
Build Robust Deal Pipeline
Establish broker relationships
Build off-market deal flow
Underwrite multiple properties
Selectively invest in attractive properties
3-18 month timeline from underwriting to acquisition
CapEx Improvements
Cure deferred maintenance
Renovation of units
Additional or upgraded amenities
Exterior improvements
6-12 month timeline
Bring Rents to Market Rates
In place rents are typically 20-40% below current market rates due to less professional management
Actively work through the rent roll to renew leases at current rates, greatly improving cash flow
12-36 month timeline
Exit
Typically 3-5 year holding period
Increased liquidity due to disciplined deal size
Potential buyers include existing market of private stabilized cash flow buyers
Vertical Integration
Increased control and transparency that results in reduced risk and greater returns
Asset Management
Graceada professionals have experience from Shorenstein, Buzz Oates, JLL, CBRE, Prometheus, and REOCs, as well as designations including CCIM and CPM. Graceada utilizes industry leading asset management software, such as ARGUS and RealPage.
Construction Management
Graceada has 50+ years of combined experience in construction management and maintains EPA universal designation and multiple specialty contractor licenses, including HVAC and landscape.
Property & Fund Accounting
Graceada professionals have experience from John Hancock Farmland (pension investing), Moss Adams, Pulte Homes, and REOCs, as well as designations such as CPA. Graceada utilizes industry leading property and fund accounting software, such as Juniper Square and Yardi. Each fund receives an annual audit by a third-party audit firm.
Property Management
Graceada has more than a decade of third-party property management experience, managing some of the largest assets in the regions. They are an Accredited Management Organization with the Institute of Real Estate Management. Graceada utilizes industry leading property management software, such as Yardi, Voyager,and Building Engines.
Institutional Expertise
Graceada Partners employs institutional expertise and industry best practices to inefficient markets.
Experience
John Hancock
Shorenstein Properties
JLL
Prometheus
Blue Owl
CBRE
JP Morgan
PGIM Real Estate
Goldman Sachs
Buzz Oates Companies
Pulte Group
Strategies + Practices
SEC Registered Advisor
Vertically Integrated
Third-Party Valuations
Building Systems Al
Technology-Enabled Leasing
Green Auditing
Proprietary Al & Data Support Acquisition Process
Energy Efficiency Audits
Chief Compliance Officer
Audited Fund Financials and GAAP Accounting
Institutional IT Best Practices: MFA, firewall, secondary email protection, IT security training
Segregation of Duties
Human Resources and Risk Management
Proptech
HANK.AI: HVAC system optimization & indoor health
Aquicore: Energy efficiency Al to identify opportunities & attain energy reduction goals
Elise Al: Residential CRM automated communication/lead tracking software
Cove: Commercial tenant communication and vendor work order management
CommercialCafe: Commercial tenant portal
Jetty: Residential deposit bond assistance program
RentCafé: Residential tenant and applicant portal
Procore: Construction management
Wrike: Work management software
VeriFast: Residential application review software
Environmental Sustainability
UN PRI Signatory
GRESB benchmarking
Water Consumption Al
Energy Efficiency Al
Green Auditing
Energy Star Portfolio Manager (ESPM) and CA Benchmarking
Building Systems Al for Indoor Health & Air Quality
LED & Other Energy Efficiency Retrofits
Recycling and Composting Programs
Outdoor Amenities
Designations + Tools
Chartered Financial Analyst (CFA)
Certified Property Manager (CPM)
IREM Accredited Management Organization
Certified Public Accountant (CPA)
FINRA board of arbitrators
Certified Commercial Investment Member (CCIM)
Environmental Protection Agency (EPA) certified
Juniper Square
Yardi Systems
Costar
Service Providers + Affiliations
CohnReznick (auditor)
Baker Tilly (tax)
ACA Group (compliance)
Marsh McLennan (insurance)
Difede Ramsdell Bender (legal)
IREM (Institute of Real Estate Management)
PREA (Pension Real Estate Association)
NAREIM (National Association of Real Estate investment Managers)
National Society of Compliance Professionals
UNPRI (UN Principle for Responsible Investing)
GRESB (Global Real Estate Sustainability Benchmark)
SACRS (California State Association of County Retirement Systems)
Historical Deal Flow & Selectivity
Evaluated over 700 Properties Representing $10 Billion in Deal Flow
The Firm is extremely selective and has only purchased about 5% of what it has evaluated.
Executed on 53 Apartment or Industrial Park Properties, Representing
Approximately $590 Million in Value
Active De-Risking of Investments
Graceada’s leadership team has collectively managed over $10 billion in assets across all four property types through the last three decades of market cycles. The Firm was founded in December 2008 and spent its formative years in the Global Financial Crisis, managing distressed assets for foreclosed borrowers, special services, and special assets teams. This experience and the leadership team’s prior experience was foundational in how the Firm invests and mitigates downside risk.
The three core principles the Firm focuses on are:
Buy Well
One of the best mitigants to risk is buying properties well. This is why Graceada focuses on a proprietary pipeline of off-market investments. This allows the Firm to negotiate on a one-buyer-to-one-seller basis versus a bidding, competitive environment. Because, on average, Graceada purchases one property for every 20 evaluated, the Firm is able to identify value relative to the market.
Acquire with Conservative Debt
From experience gained in the Global Financial Crisis, Graceada has always had a preference for fixed rate date and conservative leverage from balance sheet lenders. Graceada avoids the use of bridge and securitized debt when possible. Current Graceada portfolio-wide leverage is 55%.
Add Value Quickly
The fastest way to create margin of safety in an investment is to grow net operating income (NOI) and cash flow. This effectively de-levers the investment and provides optionality on sale versus hold. Graceada focuses on acquiring properties where the Firm can quickly grow NOI. On average, NOI growth begins to occur in the Firm’s properties within the first three months of acquisition. The Firm’s vertically integrated team is adept at quickly adding value to investments and growing margin of safety.