Gristelco Capital invests capital based on a comprehensive assessment of risks and rewards. The level of risk varies in each asset depending on factors including product type, geographic region, market conditions, occupancy levels, etc. Accordingly, Gristelco Capital categorizes each opportunity and makes investments across the risk spectrum (Core, Core-Plus, Value-Add, and Opportunistic) and ultimately ensures that the expected return is commensurate with the various risks associated with each transaction.
Gristelco Capital Core strategy aims to invest capital in best-in-class real estate with the least risk and a focus on capital preservation and stability of current income. Such assets are often Class-A buildings in primary markets, and often have net-leases ultimately providing the highest predictability of cash flow. The targeted yields for Gristelco Capital Core strategy are a 5-7% Cash on Cash, and a 7-9% IRR.
Gristelco Capital Value-Add strategy focuses on buying income-generating assets at a steep discount to replacement cost. These assets typically have 50-70% occupancy, and require major capital improvements and repositioning of operational and physical issues in order to enhance the asset prior to achieving higher occupancy levels. Gristelco Capital Value-Add strategy generally targets minimal cash-on-cash returns in 0-5% range, with an expected IRR of 18%+.
Gristelco Capital Opportunistic strategy is the highest on the risk spectrum and generally includes investment in ground-up development projects or acquisition of distressed assets that have occupancy levels lower than 50%. Opportunistic acquisitions are the most difficult to finance and most capital intensive. Gristelco Capital does not expect any cash flow when executing investments in this strategy, but also expects the highest upside upon execution of the business plan. The targeted IRR for Gristelco Capital Opportunistic strategy is 20%+.