The fact is, while it is possible to produce eye-popping returns using maximum leverage, the downside risk is equally large and potentially much greater. At Leader, we believe that the stability and security associated with the prudent use of borrowed money is the key to sustainable success in commercial real estate investing.
Our structure allows you to decide how involved in your property you are. Choose to enjoy ownership passively through our managed process or remain involved in the board which reviews new tenants, approves new equipment or contracts. We offer consistent reporting and the choice to be involved in the management of your properties, in contrast to owning a mutual fund or REIT with an unknown pool of properties, tenants, or markets.
1 When we put money to work—yours and ours—our preference is to invest in multi-tenant properties located in desirable areas, with the features and sizing that have historically produced consistently successful results.
2 When we raise capital for a fund, we target an amount that is consistent with a maximum debt load of 60-65%, which we believe affords our investors a sufficient cushion to weather adverse changes in market conditions or the broader economy.
4 Our strategy going in is aimed at maintaining the cash flow necessary to make the best decisions for the fund, rather than being forced to act—or react—at inopportune times. Operating in this way, we can adjust tenancies where needed, increase rental rates as appropriate, and continually work to facilitate asset appreciation over time.
3 We generally focus properties where the prospect of vacancies is low, but we also consider opportunities where vacancies exist, or are anticipated. In those cases, we will have a known budget in place to fill the vacancy.
5 Our targeted deal size in each fund is $4-10 million, though some properties will potentially be considered for select commercial real estate opportunities with price tags up to $40 million.
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