Our Five Core Competencies

Our Five Core Competencies

Investment Origination
Investment Underwriting

What makes profit-center real estate an attractive asset class is that it has three sources of payment: The cash flows produced by the business that operates in the property we own (our primary payment source); the credit support offered by the tenant's overall business (our secondary payment source); and the value underlying the real estate in which we invest (our third payment source). Our methods of evaluating investment risk, looking at each of these three variables, have been developed over many years and over 7,000 property investments. The upshot is that we have sophisticated risk evaluation tools and insights that are designed to offer greater risk-adjusted investment results than those available to most real estate investors.

Investment Documentation

Over thirty years, we have learned that lease contracts, and not tenant credit metrics, are the principal governors of investment risk. Part of contract creation is embodied in the investment underwriting process: The prices we pay for the real estate; the ability of the tenants to pay our rents from the operations housed within our real estate; the rents and escalations we receive; and the support offered to the investment by tenant credit quality. These factors are ultimately incorporated into our contracts and supported by third party diligence, including appraisals, property condition reports, environmental reports and other diligence. Finally, the contracts we create incorporate alignments of interest, such as the common use of master leases and bankruptcy-remote investment structures. Altogether, our documentation process, like our approach to underwriting, has evolved over decades and offers investors in S|T|O|R|E a value that most could not create for themselves.

Portfolio Management

It is a common fallacy that net lease real estate investment portfolios require little management. They must be actively managed, but with a greater focus on the minority of investments that have a higher risk potential to experience future problems. Over thirty years, we have learned how to monitor unit-level profit and loss statements, tenant corporate financial statements and the timely payment of property taxes and insurance in order to gauge portfolio quality. S|T|O|R|E represents our third, and most highly developed servicing platform. We are virtually paperless, can access granular or highly detailed information from virtually anywhere and are highly scalable. Having such systems helps us effectively monitor and reduce tenant credit risk at the property level. And when combined with our high degree of financial and operating flexibility, we are able to realize better shareholder risk-adjusted rates of return on our invested capital.

Financial Reporting and Treasury