What We Do

Always Welcome

Reliable –
Diversified.

WealthStone seeks joint venture partners from a global base of experienced family offices, business organizations, endowments, foundations and wealth advisors for a diverse and quality commercial real estate assets.

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welcome investors

By nature, commercial real estate is capital intensive and requires expertise to navigate its complexity. Real estate acquisitions require extensive due diligence and underwriting to develop creative and effective business plans to extract value through physical, operational and financial solutions. Our management team has navigated 20 years of business cycles and completed over $2 billion of direct real estate transaction and development experience across all major real estate classes.

Commercial real estate is an important and growing asset class allocation, having the ability to generate wealth and attractive returns with potentially lower volatility than publicly traded stocks. Real estate is also an effective hedge against inflation since private market real estate values have historically exhibited low correlation to publicly traded stocks. Commercial real estate also provides the potential for both income/current yield from tenant rental income and capital appreciation from increased property value over time. Acquiring across geographic markets and property types is a key to diversification and mitigating concentration risk.

WealthStone’s team is experienced in working with foreign partnerships and joint-ventures and can accommodate their unique tax structuring requirements.

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Target Returns

Knowledge is key.

WealthStone acquires a broad variety of real estate assets that are projected to provide a potential total annualized return of 10% to 12%, including an annual cash dividend of 5% to 8%.

 

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Real estate assets are typically grouped into four primary strategy categories based on strategy and inherent risk. Those four categories are: core, core-plus, value-added and opportunistic. The key differentiator among these categories is the risk-return profile. Moving between these strategies is a balancing act between taking on more or less risk, and in theory, being compensated for that risk with a higher or lower return.

At WealthStone, we take into consideration in the risk-return profile a variety of factors including:

  • Geography: Location has a significant impact on risk. An asset in the largest markets over smaller, secondary markets where there is less transaction activity impacts both the level of liquidity and the depth of product type available. Larger markets play a critical role in mitigating risk, since they dramatically improve the desire for tenants, buyers, and sellers to transact.
  • Debt: Increasing debt levels typically increases risk. Moderate debt at prudent interest rates usually furthers partnership returns, yet it can be detrimental when a property cannot service its mortgage payments. An opportunity with a high return that is loaded with high debt can present an unreasonable risk in order to achieve that higher return.
  • Asset Class: The type of real estate property has a significant impact on the risk profile. Multifamily for-lease, including specialized multifamily such as senior living and student housing, as well as industrial properties and necessity retail such as grocery stores and pharmacies typically involve lower risk than other asset classes. Properties such as office buildings and shopping centers with discretionary retail are usually considered moderate risk. Finally, properties which are heavily dependent on active operations to produce income, such as hotels, generally feature a higher risk profile. However, when bought correctly, a hotel’s value can increase substantially through operational improvement and produce higher returns.
  • Simplicity: Risk often has an immediate correlation with the number of moving parts to a real estate opportunity. Buying a long-term, fully leased office building that requires minimal renovations carries less risk than a ground-up development of the same office building, hence there is a spectrum of returns among different opportunities.
  • Management: Partnering with a team that has experience with specific asset classes, markets, demographic trends, property operations, renovation/development and financing options can mitigate the inherent risk in real estate.
  • Due Diligence: Knowledge is key. Information about a major new tenant looking for space, an airport expansion, a major employer moving into the area, new highway access, convenient new zoning regulations, etc., can be used to gain a competitive advantage when pursuing real estate opportunities. Real estate is local and owners take advantage of a thorough due diligence processes to obtain information that can reduce risk and provide improved returns, or to disengage from a potential opportunity when appropriate.
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Acquisition Criteria

Opportunistic –
Cash Flow Component.

WealthStone pursues a broad array of opportunities that meet its acquisition criteria seeking current income, capital appreciation or a balance between the two. We pursue a broad array of acquisition and development opportunities, including the development and acquisition of both for-lease and for-sale residential properties, including multi-family, senior living and student housing; office buildings; retail centers; industrial properties; hotels and self-storage.

We seek assets located in markets with greater than 1 million in metropolitan area population. Our typical project requires between $10 million to over $100 million in total capitalization.

acquisition criteria wealthstone
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Strategy

Attractive Basis –
Prudent Management.

WealthStone’s focus is on properties located in the U.S. We target areas with metropolitan populations greater than 1 million, particularly those with low unemployment rates, which demonstrate strong and durable employment growth driven by technology, healthcare, financial services, education and energy sectors.

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We pursue a broad array of opportunities to acquire properties that are expected to provide current income, capital appreciation or a balance of the two. WealthStone intends to acquire and develop both for-lease and for-sale residential properties, including multi-family, senior living and student housing; office buildings; retail centers; industrial properties; hotels and self-storage. Assets that are located in markets that exhibit attractive demographics and fundamentals, and which we believe can generate a current or near-term cash flow component.

When considering the fundamentals of commercial real estate, our team looks at several key factors and asks:

  • Is this property priced below comparable sales prices in the market or below the replacement cost of the building?
  • Are the risks inherent to the operation of commercial real estate (loss of occupancy, need for capital, maintenance, etc.) well mitigated by the circumstances with respect to a specific property?
  • How do these risks and expected returns stack up to other available opportunities?

WealthStone’s underwriting focuses on preservation of capital, even with projects that have a projected substantial upside. We concentrate on metrics that are less skewed using financing such as unlevered cash flow yields and comparable sales. If financing is needed to acquire a property, conservative leverage is considered, at levels expected to protect the asset in the case of an economic slowdown and to maintain prudent management.

Target opportunities generally range from $5 million to $40 million of equity capital and $10 million to over $100 million of total capitalization per project.

WealthStone believes in flexible joint-venture arrangements that will allow us to uncover value in real estate assets while aligning interests with our partners.

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