REAL ESTATE INVESTMENT
Three 33 believes that current real estate investment opportunities are deals which are in some way undermanaged, underutilized, poorly executed, or improperly conceived – and which can be revitalized and or optimized through structured financial and project management.
By definition, successful sourcing and execution of these deals requires a potent integration of real estate finance, acquisitions, redevelopment, and marketing. Our team is composed of seasoned and resourceful market leaders in these areas. We offer the depth and breadth of experience necessary to source, manage, and add value to our investments.
While the current state of the commercial real estate market is mature we continue to believe and demonstrate that there are still opportunities to selectively acquire quality assets at favorable pricing. We believe the best opportunities to acquire properties are those that will benefit from our hands-on management and collaboration.
Over the last 25-years, multi-family real estate provided the highest average annual total returns of any commercial real estate sector with the second-lowest level of volatility. The multi-family sector has four pillars that drive superior risk-adjusted returns when compared to other commercial real estate categories:
Everybody needs a place to live. Housing and a roof over our heads, will always be in demand. This constant demand fuels the nearly constant multi-family occupancy rate of 96%.
The credit risk is spread across multiple tenants. The potential for interruptions in the cash flows as a result of a defaulting tenant is spread among multiple tenants. Small changes in occupancy or defaulting tenants will not significantly impact cash flow.
Superior shelter to other asset classes – Multi-families have the most favorable income tax treatments of any asset class through the use of depreciation and cost segregation to accelerate depreciation. Provisions in the Tax Cut and Jobs Act of 2017 effectively shelters all property income (and more) through the life of an investment.
Short leases, remodels, common area and exterior improvements among multiple tenants create opportunities to increase revenues.
Three 33’s goal is to continue to multiply its assets on the North Shore of Boston and other strategic submarkets where we see future economic growth and opportunities to improve the value of the assets. We will seek to improve the profitability of each asset by combining revenue-enhancing initiatives with cost reductions.
Three 33 will continue to identify mismanaged and functionally inferior multi-family properties that have in-place cash flow but can benefit from a value-added business plan.
Typical acquisitions are properties that are well located in a supply-constrained area but yield inferior cash flow relative to competitive properties due to poor management, functional obsolescence, and inappropriate market positioning. The properties will possess the physical qualities appropriate to the market and favorable accompanying demographics. The Company will continue to improve these assets through active management, and repositioning programs including:
- Implementation of specific and intensive management program
- Cosmetics and branding focused renovation of property, with an emphasis on improving overall curb appeal (e.g., common areas, exterior, signage, parking, landscaping, lighting, etc.)., while avoiding intensive rehabilitation and infrastructure work
- Thoughtful rehabilitation of underused buildings or capacity (e.g., upgrading or redeveloping older buildings and establishing more effective use of existing spaces)
- Introduction of “green” or sustainable design measures whenever possible. These measures will allow us to lower and control expenses, enhance the brand, and create value
- The pursuit of expansion opportunities where appropriate
Three 33’s investment approach will continue to involve rigorous, experience-based analysis of each potential acquisition and its market. Our team will develop an intimate understanding of each property, and will design and implement a business plan for each asset which will maximize value through appropriate responses to individual conditions.