Why is Graceada a good fit for RIAs?
Learn why these RIAs found the Graceada Partners approach to be a good fit for their strategy and investing philosophies.
Where does value-add real estate fit into your portfolio?
Understand how value-add real estate’s return enhancing characteristics fit into a portfolio and operates very differently than traditional direct real estate investing or public REIT investing. Learn why Graceada Partners’ value-add strategy, coupled with our specific geographic targeting of secondary and tertiary markets might be a good addition to your portfolio.
Real estate has been an integral part of our philosophy for 27 years now.
Steven Weintraub, CFP®
Advisor, West Coast Financial
I invest with Graceada because they’ve mastered a niche that you can’t really find anywhere else.
Jeff Burrow
President, Sierra Ocean
This sort of investing, when it also is backed up by really high quality and talent fits the archetype for our clients.
Nathan Torinus
Founder, TOR Wealth
Question & Answers
Got a question that you don’t see answered here? Drop us an email.
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Long term ownership of real estate or open-end fund (REIT) investment is focused on cash flow and market appreciation – it is often considered an inflation hedging bond replacement or bond alternative. There is very little “active management” or value creation through executing an active strategy with the property or portfolio. Real estate private equity, much like private equity, is focused on finding properties that are under-valued, mismanaged, and have some ability to create value through executing an active business plan. These investments are certainly affected by the broader market, but not as much as passively owned real estate or investment in a REIT, since those investments have no ability to offset market declines through active value creation.
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Real estate private equity investments are focused on maximizing overall returns. We target net returns of high teens IRR, +2.0x equity multiple. Like private equity as a whole, real estate private equity returns come primarily from value creation and sale of the asset versus cash flow. Cash flow is a component of return (through quarterly distributions), but the majority of the return comes as assets are optimized and sold. Early in the portfolio, capital is being called as investments are identified. Limited cash flow is generated during the investment period. Once the investment period is complete, assets are sold and proceeds distributed.
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While real estate private equity is focused on high return generation versus tax saving, we do endeavor to be as tax efficient as possible. Cost segregation studies are completed on all properties to accelerate depreciation (tax loss) in the early years of the investment – often resulting in a taxable loss early in the investment life. Properties are held long enough to result in long term capital gain versus short term.
Is private equity real estate a good fit for your portfolio?
Fill out this form and someone from our team will reach out to answer specific questions you may have.
Relevant Content From Our Podcast
Learn about our investing thesis, hear directly from the principal of an RIA firm, and more on our private equity real estate podcast, Durable Value.
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