Felton Properties Inc. is currently seeking to further its investment in the Pacific Northwest, California, Colorado, Utah, Minnesota, Wisconsin and Indiana, and will consider other central/western markets. We are looking for office, flex/industrial as well as discounted mortgage note sales. We are well-capitalized and actively pursue value-add as well as stabilized opportunities. Felton Properties’ investment strategy is to acquire intrinsically valued commercial real estate, improve operational efficiency, increase or maintain stabilized occupancy, maximize cash flow and sell or refinance the property once its value has been maximized. We are proud of our track record of reliable closings. Since our inception in 1997, we have closed on every property that we have put into contract to purchase.
Felton Properties typically seeks investments where we believe that a leveraged Internal Rate of Return (IRR) to the investor in excess of 13% can be achieved. In formulating our pro-forma returns to the investor, conservative assumptions are always utilized in order to maximize reliability and increase the probability of out-performance. Depending on the nature of the investment, some projects may rely more heavily on a “value-add” component of renovation and lease-up of an asset. These investments may show limited recurring distributions at the outset, but tend to show strong capital appreciation once the value-add strategy has been implemented. Other investments may attempt to maximize recurring distributions on a stabilized property. The investment strategy for each acquisition varies and is outlined accordingly in the Offering Memorandum for each investment.
Investment Duration – Return of Capital
We generally hold an investment for five to ten years, and possibly longer depending on the property. Our usual strategy, however, is to return our partner’s original capital as quickly as possible. When holding an asset for a longer period of time, this goal may be accomplished either through refinancing of the asset, or in the case of the acquisition of more than one building, by the partial sale of the assets.
Once the original capital has been returned, our investors can enjoy a stable cash flow while capital is no longer at risk. Felton Properties will seek to sell the asset when we determine that its value has been maximized for the foreseeable future.
Asset Types and Location
Our focus is on the acquisition of office, flex, industrial and retail properties in the Western United States. We have focused our acquisitions to-date primarily in the states of Washington, Oregon, California, Colorado, Utah, Minnesota and Wisconsin; however, we are constantly assessing other markets in which we see opportunity. Given our hands-on approach to management and operation, we will not purchase property that the principals of Felton Properties cannot easily visit for a day trip.
The Felton Properties Approach to Raising Capital
Our approach to raising capital is to secure the capital necessary for a transaction on a deal-by-deal basis. This allows us to be very selective in the investments that we make since we are not under pressure to deploy capital that has been raised in advance. As an example, in the midst of the commercial real estate bubble from 2006 to 2008, Felton Properties made only two acquisitions, since we found it difficult to source investments which we felt could show an appropriate ratio of risk/reward with intrinsic value.
Some of our investors/partners seek stable returns over the long-term while others are looking for more aggressive returns with a relatively short time horizon. Our approach allows us the flexibility to invest with the right investor/partner, or combination of investors/partners, for any particular investment. It also allows our investment partners to choose the right investment for them on a deal-by-deal basis.
Contact us for more information and to learn about future investments.