SERVICES

Step 1. Deal Sourcing

ARC believes that the following KEY factors favor San Francisco Bay Area and will continue driving it to outperform others in particular:

  • Knowledge-based economies will continue to outperform other regional economies in the short to long term;

  • Rapidly increasing population density will drive the demands from short to long term;

  • Low inventory market will continue to outperform other regional markets in short to middle term; 

  • Tier 1 markets have more diverse access to investment capital and stronger ties to global markets. 

ARC will continue sourcing value-add long-term opportunities in such high value markets.

Step 2. Due Diligence

A KEY element to successfully investing in commercial real estate is performing an adequate Due Diligence (DD) investigation prior to becoming legally bound to acquire the property:

  • DD will assure awareness of all material facts relevant to the intended value-add strategy of the property after closing;

  • DD will disclose any legal, financial, operational risks, and predict the achievable revenue stream, including the amount, velocity and durability;

  • DD will validate the financial strategy for maximizing the overall cash-flows and financial return.

It will minimize the risk from leveraging ARC's sophisticated experience and expertise on DD.

Step 3. Deal Structure

Unlike other real estate investment firms which contribute <5% capital into each deal, ARC will contribute 25-50% capital into each deal and raise 50-75% from our limited partners. Our high capital contribution ratio guarantee that:

  • ARC will only consider high value opportunities with high chance of success to decrease the potential legal, financial or operational risk for our limited partners and ourselves, for EACH DEAL, from DAY ONE;

  • ARC will be actively maximizing the overall financial values and returns to our limited partners and ourselves, for EACH DEAL, from DAY ONE.

ARC will personalize the deal structure and financial planning to help our limited partners achieve a long term prosperity.

Step 4. Value-Add

ARC's asset management service has focused on key value-add strategies, including:

  • Timely property renovations to upgrade the asset condition; 

  • Periodic improvement on tenant mix and rent increase to maximize the financial return;

  • Lease management to minimize the operational risk;

  • Financial planning and tax planning to leverage tax benefits;

  • Daily oversight of properties.

Through this discipline approach, ARC has been able to guarantee our equity partners a regular 7.0% return and overall returns of over 20% per year.

Step 5. Cash Distribution

Our commercial real estate investments provides attractive financial returns to our investors, including

  • Stable cash income. The rental income is more stable than stock and bond assets, as rental lease help mitigate economic fluctuations;

  • High yield cash distribution. Our investments generate 7% annual cash income, which significantly outperforms bond assets in such low interest environment;

  • Better asset security. The direct ownership and always positive cash flow ensure that we never lose money on our real estate investment, even in market corrections. The Buy-and-Hold strategy works best in real estate practice.

Step 6. Exit & Return

Real estate assets produce two main financial returns: the annual rental income and the long term appreciation. According to our experience, to maximize the financial return from the long term asset appreciation, it is critical to setup an exit strategy from DAY ONE of acquiring the property. The exit strategy should define a clear path to realize the gain and solve the following three questions: (1) When to exit; (2) How to exit; (3) How to plan for the tax consequence. Our sophisticated success and mix expertise enables us to provide personalized solutions to help our investors achieve better deserved financial returns from their real estate ownerships.

© 2014-2019 ZENSTONE VENTURE CAPITAL LLC 

The material on this website is intended for informational purposes only, does not constitute investment advice or analysis, or a recommendation, or an offer of solicitation, and is not the basis for any contract or other agreement to make any investment, or for ZenStone Venture Capital, investors to enter into or arrange any type of transaction.