Tactical Investments with Minimal Risk
Our preferred deal size is above what most individual investors can afford and below what most institutions are willing to fund. Our strategy enables us to capitalize on this market inefficiency, producing better returns and a higher close rate on deals that we pursue.
Generally, larger deals require more effort to pursue and are significantly more competitive, driving down returns. We seek aggregation plays, where we gain efficiency by acquiring multiple deals of a similar type.
CCM Real Estate, as the majority investor, often provides up to 90 percent of the equity required in its transactions, using joint ventures with flexible return structures. We do not assume additional exposure, such as completion or loan guarantees. Ultimately, the goals of our investments are strong cash flow and solid returns, with reasonable risk. Patient in our deal flow and investment horizon, we typically hold each of our assets for an extended period of time.
Core Property Criteria
- Type: Retail (grocery anchored, power centers, strip centers), multifamily, medical office, senior living
- Geography: Southeast U.S. and select multifamily in the Northeast
Target Investment Characteristics
- Deal Size: $5.0-$40.0 million per deal; CCM equity investments of $2.0-$10.0 million per deal
- Hold Period: Five-to-seven-year average for those projects with fewer tenants and whose value is more dependent on remaining lease term; longer for others
- Returns: Risk-adjusted, 8%-10% average cash-on-cash yield over 5 years with a high-teens IRR for a 5-year hold; 10%-12% average cash-on-cash yield over 10 years with a mid-teens IRR for a 10-year hold