Renaissance Enterprises, Inc. (REI) has developed a unique business model which focuses on the more operationally intensive real estate of urban seniors housing and selected redevelopment assets. This approach allows REI to optimize its returns on these assets by funding a three-pronged investment strategy.  The business model will leverage relationships and integrate portfolio experience that the principals of REI have developed over the past 20 years and will capitalize on a pipeline of opportunities that the Clientís Company has assembled over past 24 months.  The three-pronged investment model being marketed by REI contemplates capital commitments in the following:

        1.      Fee simple real estate as individual assets or portfolios of assets

2.      Operations of both specialty real estate operating businesses as well as real estate financial service businesses

3.      Financial instruments of varying designs of liquidity that are a means to capture value in both the underlying real estate assets and the operational and service businesses that surround those assets.

REI believes that our successful performance will be defined by the talent of our strategic partners which the Clientís Company has assembled and the integration and the focus REIís principals will be able to bring to those partnerships.

REIís choice of operations partners is defined by its singular view of the trends and opportunities in its target asset classes.  For example, REI has identified key partners in the realm of senior housing who bring the skill sets of local market knowledge, team building and fiscal discipline that are crucial to a successful asset development and property management.  Specifically, REI has forged partnerships with management teams that have the ability to operate in the higher acuity portion of the senior care continuum, melding the marketing skills and hospitality aspects of independent and assisted living with the challenge of providing labor intensive healthcare services to a demanding and aging population. 

By maintaining its focus on operationally intensive real estate, REI is now able to capitalize on that deal experience and those relationships and forge them into a wider platform of related revenue sources with a new series of strategic partnerships in real estate finance.  These partners bring expertise and deal flow in tax-exempt debt, FHA and FNMA underwriting, and tax-credit equity structuring, mortgage origination and servicing with a focus and expertise in the real estate sectors that are REIís target:  senior care and urban re-development.

It is this realization of the impact of a broader range of financial instruments on real estate investing in increasingly sophisticated capital markets that is at the center of the REI strategy and that has helped create the pipeline of transactions.  As in its history of identification and opportunistic acquisition of fee simple real estate at the appropriate price, REI has brought a history of serious analytical discipline to the choice of strategic partnerships with talented professionals in the financial service business. 

This strategy not only benefits by capturing the optimal risk-reward position in the capital structure of a real estate transaction with small, strategic co-investments, but improves the return by sharing in a stream of fee income from transaction fees to mortgage servicing.  REIís investment in and co-investment with its financial partners allows REI enhanced returns from origination of a range of financial instruments from bridge loans to participating mortgages, to mezzanine and equity level investments.  It affords its financial partners a marketing advantage by making them a one-stop financial provider to their customer base. The strategic partnerships also allow REI to capture certain assets appropriate to repositioning at far below replacement cost. 

Although there are large financial service firms and investors who speculate in these securities, REI believes it is one of few real estate service companies to marry capital markets presence with a group of related operating companies.  The market analysis and real-world implementation that REIís operating partners bring to a potential capital markets transaction gives REI a unique advantage, with the ability to quietly control outstanding mortgage debt on a single property or portfolio of properties and, when appropriate,  step in to operate them. 

REIís strategy allows it to enhance its real estate investment returns by arranging various tranches of capital to its operating partners as well as benefiting from the synergies of its deal flow and capital markets expertise.  This capital may be infused either directly as equity in a property acquisition or development, or with its financial partners as various tranches of debt.  REI strives to structure such investments to generate an alignment of interest between The Clientís Company and the operating partner by requiring meaningful co-investment equity from its partner so that there is significant profit sharing generated by the individual asset investments.

Through an alignment of interests and a sensitivity to the sharing of upside with entrepreneurial operators, REI is able to bring a real operational capability to its investment portfolio.  In fact, it is the frightening lack of understanding of the operational aspects of the buildings they own that have made many of the real estate investors in this sector so wrong so often about who are the best operators.  Combined with the herd mentality of chasing deals only when the capital markets give them equity, these investors have remained unable to capture the best values that become available as counter-cyclical opportunities.  This makes REI the financial partner of choice for the best operators.

 

 

 

 

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