TREO employs an entrepreneurial investment strategy in sectors that require specialized market knowledge, exhibit historically recession-resistant cash flows and contain strong demographic growth. We pursue an opportunistic investment approach that seeks to identify “off-market” deals with motivated sellers for underperforming assets or assets that can be transformed through a value-add approach. This strategy is designed to consistently achieve attractive risk-adjusted returns by minimizing competition with capital sources, while maximizing value through intensive post-acquisition management.
TREO targets capital appreciation opportunities that allow us to maximize value through the repositioning, transformation and/or improvement of underperforming real estate assets. We select properties for their ability to be re-financed within 24-36 months of acquisition (returning a majority of capital to our investment partners), while distributing annualized preferred returns (8%-10%) over subordinated debt. Assets are ultimately sold when values are maximized.
TREO is most interested in shorter-term (12-36 month) transactions with a demonstrable potential to increase asset value by way of renovation, re-positioning, performance enhancement or some other significant change to the underlying real estate asset.
We also pursue Distressed Investment opportunities in assets that are experiencing some level of underperformance or market pressure, including Note Purchases from existing senior or subordinate lenders and REO assets directly from Lenders.