The flagship Arden Real Estate Partners Funds (AREP) maintain a middle market value-add and thematic strategy that invests in high quality commercial real estate assets in top US MSA’s, dynamic growth markets and critical logistic centers seeking to add value by:
- Buy It | Fix It | Sell It: process to address capital, operational, and/or physical discrepancies.
- Aggregation of assets to achieve scale premiums in fragmented market segments.
Targeted sector focus on the following sectors where Arden expertise provides a distinct advantage and offer attractive value in order to achieve targeted risk-adjusted returns:
- Niche last mile infill light industrial: multi-tenant (shallow and mid-bay) and industrial service facilities (ISF) including outdoor storage (IOS):
- Compelling supply/demand dynamics.
- Short weight average lease term (WALT) – typically 2-4 years – provides positive inflation sensitivity.
- Highly fragmented market with limited institutional sponsorship provides considerable opportunity to create scale premiums at exist value through aggregation strategies.
- Diversified tenant base mitigates credit risk.
- Moderate capital expenditure business plans.
- Operationally intensive, creating barriers to entry for scale portfolios and the opportunity to leverage our vertically integrated industrial operation platform to add value.
- Living (Multifamily and Student Housing)
- High quality recently built assets.
- Multifamily in high growth markets with strong supply/demand fundaments.
- Student housing adjacent to Tier-1 universities
- Capitalize on distressed/over-extended sponsors to acquire assets at an attractive basis and significant discount to replacement cost.
- Create value via aggregation of assets.
- Special Situations/Gap Capital:
- Owners of quality assets facing capital structure/refinancing challenges.
- Positive cash flow business plans.
- Provide gap capital solutions at compelling terms with equity like return profile and low attachment point with significant subordinated sponsor equity.
- Premier institutional quality properties in high barrier to entry major markets levering Arden’s depth and experience (hospitality and trophy office).
- Potential to add value to sponsor via operating expertise:
Buy It – Asset Pricing Strategy
- Basis-driven buying
- Core quality assets in core locations
- Distressed situations
- Fragmented non-institutional ownership
- Significant discount to replacement cost with in-place positive cash flow
Fix It – Clear & Compelling Value-Add & Aggregation Programs:
- Address capital deficiencies
- Resolve operational deficiencies
- Correct physical deficiencies
- More favorable capital markets execution through aggregation
Sell It – Downside Protection & Risk Mitigation:
- IRR & Equity Multiple sensitivity analysis
- Short business plans to reduce risk and accelerate return of capital
- Sell performing assets or portfolios at optimal times
- Maximize investor returns via scale portfolio premiums
Reinvesting eligible capital gains from stocks, real estate, businesses and other assets into long-term investments located in Qualified Opportunity Zones through a Qualified Opportunity Fund vehicle can provide significant tax benefits to investors. Arden is a leading fund manager in the space having closed Arden Qualified Opportunity Zone Fund, L.P. in 2022 at $356M and employs a strategy focused on the following:
- Directly develop or partner with premier developers on high quality multifamily and student housing projects
- High growth markets with demonstrated strong fundamentals.
- Underwrite to achieve attractive target returns not including potential tax benefits.
- Potential for shorter J-Curve due to innovative joint venture fund structure.
- Current projects located in Nashville, Tampa, New York City, Salt Lake City, Miami, Tallahassee, and Jersey City, NJ.
The Arden Credit Funds Strategy (“ACF”) originates debt investments secured by commercial real estate across the U.S.
- Invests in first mortgage loans, B-notes, mezzanine loans, and preferred equity
- Focuses on top 35 U.S. MSA’s and select secondary markets
- Asset classes include Office, Hotel, Multifamily, Retail, Industrial and Residential Condominiums (in select markets)
- Provides financing for ground-up construction; transitional assets and stabilized assets
- Seeks to utilize Arden Group’s equity underwriting expertise to effectively underwrite debt investments
RXR ARDEN Digital Ventures is a venture capital firm focused on real estate technology investments.
This venture empowers founders who improve our communities through digitizing the built environment.