Mark Epstein & Associates Real Estate Investment Opportunities and Asset Management

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REAL ESTATE INVESTMENT OPPORTUNITIES ASSET MANAGEMENT

By integrating market research with proprietary investor databases, MEA analyzes market cycles, anticipates trends and works with capital in local, national and global markets.  MEA clients include domestic and foreign-based individual and institutional real estate investors, opportunity funds, owner/developers, and entities with tax-sensitive exit strategies.

CalculatorWith market-leading professionals specializing in office, industrial, retail, multi-housing and hotels, MEA works in tandem with debt and equity financing to offer recapitalization advice, investment valuation, market research, underwriting and repositioning services.  Globally, MEA’s principals have completed in excess of $183 million worth of real estate assets acquired, developed, asset managed and financed on behalf of MEA and our clients.

 

Click on a heading below for more details.

CLEAR SET OF VALUES

ScalesMEA is guided by a clear set of values that serve as a road map to every aspect of our business. We bring resolute determination to the pursuit, management and disposition of every investment. Our methodology is quantitative and qualitative. We trust our experience and judgment to create opportunities, manage risk and gauge market timing. Our expertise extends to all major property types and land uses – office, industrial, retail, hotel, residential and mixed-use properties.

KEY ELEMENTS OF INVESTING

Graph
  • Thorough analysis and planning
  • Invest our own capital along side our partners
  • Not fee driven – we make money as we do for our investors, by generating real returns
  • Evaluate each investment objectively, not emotionally
  • Deploy rigorous financial controls, active monitoring and hands-on management to further improve profitability
  • Rely on research and analytics to calculate market demand, risk exposure and profit potential
  • Know when to sell

GENERAL INVESTMENT CRITERIA

Asset Class - is opportunity driven.  Expertise exists within MEA that enables us to pursue transactions in the full range of real estate asset classes. 

Transaction Size - transactions with a minimum capitalization of $200,000.  The maximum capitalization is subject to the asset class, type and the merits of the specific opportunity. 

Debt Financing - use established contacts with the active lenders in the market. 

Holding Period - typically from 3 to 5 years although in some “value added” instances disposition can occur as soon as the property is renovated and repositioned.

INVESTMENT EXAMPLES

Case Study I:

Garden Beach Resort
Garden Beach Resort - before
Garden Beach Resort - after
Before
After

A corporate client had purchased a beach resort hotel that the previous owners had mismanaged.  The principals of MEA were brought in to re-position the property and to upgrade it within a specified budget.

Comprehensive Business Analysis

We did a thorough and objective analysis of the status of the hotel and rated it a 2.5 star property. We then outlined all the specific areas where improvements were necessary to raise its status to a 4 star hotel. We developed a business plan to increase its occupancy rate, its room rate, and its repeat business. We then supervised the implementation of those changes.

Property Renovation

We recruited a hotel design architect and negotiated with the contractor to renovate and upgrade the facility working within a strict budget.

Immediate & Ongoing Maintenance

We inventoried and categorized all areas where maintenance was required, and developed a budget, a completion schedule and an assignment of responsibilities divided between in-house and outside maintenance crews. Under our supervision, all maintenance was completed on schedule within the allocated budget.

Human Resources

After we completed a comprehensive study of the management and service staff, we selected a new HR director and evaluated existing department heads to inventory core competencies and skill levels. We then worked with the new HR director to hire new department heads where necessary. We also identified and eliminated redundant staff and filled areas where shortages affected the quality and level of guest services.  We developed and initiated a new training program to significantly improve the efficiency and quality of service, as well as boost the morale and commitment of the entire staff.

Integrated Marketing

We developed a marketing plan for re-positioning the hotel, then because of the geographic distance of the property from its owners, we recruited a local specialist to assist in executing the plan. We also established a Sales & Marketing Department to broaden the exposure to foreign markets.
The renovation and re-positioning were completed on schedule and within budget, resulting in the hotel being rated as a 4 star both regionally and internationally. Thai Airways International, a member of the "Star Alliance" now includes the hotel in its Mileage Rewards program.
The result of our comprehensive program was an 84.6% increase in the hotel's average daily rate, a 12% increase in annualized return on investment.

Garden Beach Resort pool - before
Garden Beach Resort pool - after
Before
After

 

Case Study II:  Bank Owned “Value Add” Properties at Steep Discounts

Arial view of Monterey Bay

1367 Mingo Avenue, Seaside, CA
MEA recently sponsored two bank owned distressed property investments along with Equity Partners.  The purchase prices were for 34 cents on the dollar of face loan amount for one and 50 cents on the dollar for the other.  The purchases were in the City of Seaside in Monterey County, California, due to its strong rental demand and first time, entry level Buyer demand.  Both successes were due to all cash offers and a relatively quick close. 

One of the properties has been completely renovated in six weeks and is now rented.  Cash flow of 4% on investment from rental income will be distributed quarterly to the investors.  Equity Partners’ annualized return is projected at 23%Aerial view of Seaside, CA neighborhood

 

 

 

 

 

TIME TO TAKE ACTION

watchThe window of opportunity to acquire steeply discounted, fundamentally sound, entry-level properties from the Banks will not be open indefinitely. If you or someone you know wants to invest in these opportunities, call or e-mail MEA to discuss practical issues including the best way to take title (subject to your CPA and / or Tax Attorney’s blessing), investment amounts and timing.

INVESTMENT EXPERTISE

MEA facilitates opportunistic investments through transaction origination, underwriting, capital formation, calcasset management and disposition services. MEA ensures alignment with its clients through co-investment in the transactions it sponsors. Prior to closing any acquisition, an asset-level business plan is established which details the strategies to maximize return on investment through cash flow during the holding period and appreciation upon sale or refinance. Investments are actively managed through strategic, yet independent, operating companies bound by the common MEA values, approach and strategy.

ASSET MANAGEMENT SERVICES

MEA provides the full spectrum of real estate asset management services in the spirit of facilitating sound investments. This includes all property types: apartment, watercanoffice, retail, hotel, industrial and land. As an independent asset manager, MEA works with its affiliates as well as third party service providers to maximize property level marketing, leasing and operating results. Investments are actively managed through strategic, yet independent, operating companies bound by the common MEA values, approach and strategy. We plan, manage and monitor real estate investments through the following functions:

• Strategic Asset Level and Investment Planning
• Property Level Operating Reports
• Investor Tax Reporting
• Cash Management
• Accounting
• Marketing and Leasing
• Property Management and Tenant Relations
• Construction Management
• Asset Disposition

Transaction and Capital Sourcing

MEA’s transaction origination network is based on extensive market connections and direct solicitation.  MEA leverages its vast experience and relationships to identify and qualify attractive situations for investment capital and real estate assets to come together. MEA provides superior underwriting and initial risk assessment through its rigorous due diligence processes. 

Transaction Structuring and Closing

MEA brings its expertise to bear in the capital sourcing, formation and structuring process using best-of-class legal, tax and asset / property management resources.  Our clients and partners have the added assurance of our risk assessment capabilities with our commitment to co-investment in the assets we manage, thereby aligning all parties' interests throughout the entire life cycle of each investment.

Risk Management

MEA’s service extends to anticipating and managing the full range of risks associated with modern property ownership including legal, liability, life / fire safety, security and specific local and environmental hazards.
 
MEA’s risk management capabilities are enhanced by its commitment to co-investment, reflecting its alignment of interests with its Equity Partners.  This is a critical component to successful partnerships.

Disposition / Liquidation

MEA utilizes its vast network to ensure each asset gets maximum market exposure at the time of disposition to obtain the best price and terms upon re-sale.

INVESTMENT OPPORTUNITY

Mark Epstein & AssociatesMEA is opportunity driven. Our primary goal is finding solid investments from a risk/reward perspective.  MEA has extensive experience in office, industrial, retail, hotel, and residential asset classes, allowing us to pursue a wide spectrum of “value added” opportunities.

MEA controls transactions via deposit money and contract obligations while our due diligence process verifies the merits of the project. Once a project has been thoroughly analyzed MEA seeks third party investors to co-invest as Equity Partners for the balance of the equity.

Access to High Quality Real Estate Investment Opportunities via long-standing relationships within the real estate industry. 

Transaction structuring capabilities are supported by highly respected and proven legal, tax and accounting specialists.

Thorough underwriting and due diligence of investment opportunities using processes developed and successfully implemented on behalf of leading institutional owners over the past twenty years.

Attention to constant value enhancement and to every detail of an assets’ capital structure and daily operations includes rigorous monitoring of mechanical systems, extraordinary and routine preventative maintenance programs and resource / conservation management.

CURRENT OPPORTUNITIES

In step with the market cycle, our current focus is acquiring steeply discounted bank owned single family homes. We have been paying between 28 – 31 cents on the dollar of the properties’ pre-bust values. MEA renovates the property, rents it at market rates and manages the asset from inception to disposition. Recent acquisitions with MEA Equity Partners have been all cash so as to successfully compete and secure the properties from the banks.

In some instances the properties are refinanced after renovation and rent up. This allows for the option of a portion of the original equity invested to acquire another property with refinance proceeds.

See Mingo and Darwin properties .pdf file

Please see Investment Examples “Bank Owned “Value Add” Properties at Steep Discounts” in the Case Studies section above for more discussion on this particular type of opportunity. We are constantly searching for sensible investment opportunities in this opportunity rich market. Call 805 927 7932 or e-mail Info@EpsteinAssociates.com if you have any questions and for “real-time” status of pending investment opportunities.

Read the REO FAQs sheet here

RESULTS BEFORE  REWARDS

MEA sources the property, negotiates the offer, gets the property in escrow, performs comprehensive due diligence during the inspection period, coordinates the successful close, generates and implements the property’s business plan (including rehab / upgrades and getting it rented in a timely manner), asset manages, coordinates the refinance, generates the quarterly reports and coordinates the sale.  MEA’s incentive / compensation is paid upon sale of the property by sharing in the profits after the Equity Partners get their original investment back plus a preferred return on their investment.

 

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