Answers to three questions investors are currently asking us:
1) Why invest now versus putting available funds in a money market fund?
You can do both! We do not call your commitment unless we’re acquiring a property. In the meantime, you can keep your dry powder in a US Treasury or money market fund earning 5%. Once we call your investment, you start earning a preferred return and will be investing in a property with a return target in excess of 10%. Being an investor now puts you in the best position to reap the rewards of Calvera’s distressed investing.
2) New multifamily construction starts are slowing. Is this good or bad for Calvera Partners?
This is generally a good thing for Calvera. Many major markets have seen a surge in new apartment supply and that has caused rents to decline. Because rates are so high, construction costs remain elevated, and rents are soft, it no longer makes sense to develop new multifamily communities. This will bring supply and demand back into equilibrium, and rents will return to an upward trend.
3) Have your investment criteria changed at all in this environment?
No. We’re still underwriting deals the same way we always have. What has changed is that we’re able to pursue nicer assets. When all values are down, it becomes a great time to trade up in quality. That’s the profile of deal we’re trying to seed our new fund with.
SAN FRANCISCO OFFICE:
2 Embarcadero Center, 8th Floor
San Francisco, CA 94111
729 Washington Ave N, Suite 600
Minneapolis, MN 55401
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Performance data listed in this website or is otherwise provided by Calvera Partners, LLC, or its affiliates (“Calvera”) with respect to a particular property or project represents past performance calculated for the relevant project and does not purport to reflect the overall performance of any private funds managed by Calvera, which may include other projects, as well as charge additional fees or carried interest, or have additional expenses, which would reduce the overall performance of the project from the perspective of a fund investor. Past performance does not guarantee future results; Current performance may be lower or higher than performance data presented. Calvera is not required by law to follow any standard methodology when calculating and representing performance data; the performance of any of Calvera’s projects may not be directly comparable to the performance of other investment vehicles or funds; and qualified potential investors can contact Calvera Partners for more current performance data of any private funds managed by Calvera.
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