Targeted Assets
The Firm seeks to purchase R&D and industrial assets at acquisition costs between $2 and $10 million per asset, but has historically made purchases above $50 million.

Opportunistic Acquisitions
Viewing our firm as an “opportunistic purchaser,” we acquire properties when there is a “value added” component available through either repositioning, re-leasing, re-configuring and/or refinancing.  The typical holding period is long for low-risk assets.  Some of our assets have been owned for over twenty years.

Cash Flow Distributions
Cash flow distributions range from 6% to 18% on our capital partners’ investments annually.  Our investment target, when reviewing an acquisition candidate, is to acquire properties that will generate distributions to our capital partners of at least 6% in the early years of the investment, increasing as the investment matures.  Generally, in years five to seven, an opportunity arises to refinance a property, retrieving capital for distribution to our capital partners or for reinvestment.

Selling
We are not motivated sellers with most of our assets, unless selling is the discipline of our capital partners or if the use of the property changes to something outside our discipline.  Our basic belief is that top quality investment real estate assets are difficult to find and more difficult to replace. That being said, when a high offer is available it will be considered.

Acquisition Considerations
The best assets in the right location consistently attract the best tenants, get the highest rent, maintain higher occupancy levels and generate the best prices on sale.  It is important that we acquire our properties at well below replacement cost.

Supply Constrained
Good quality assets have specific supply and demand characteristics in common. On the supply side, we concentrate on supply-constrained markets with significant barriers to entry. Barriers include lack of land for future development, restrictive zoning, or a political climate where growth and development are discouraged.

High Demand Locations
On the demand side, our target assets are located in large, dynamic, high growth markets with transportation advantages (such as freeway access, an airport, or port).

Refinancing
Usually after five to seven years, or after a “value-added” event, an opportunity is available to refinance an asset and generate cash to return to our Capital Partners or reinvest in new assets.

Conflict of Interest
We have no related businesses that either cause a conflict with our investment business or prevent us from being exposed to opportunities.  We are not in the brokerage business, as the lifeblood of our business is seeing acquisition opportunities first.  We have developed good working relationships with most of the leading Bay Area brokers.  They have confidence in our ability to close on quality asset opportunities and they trust that we will act with integrity and protect their interests as well.

Market Penetration
We anticipate the formation of three to four Stephens-sponsored investment companies per year, ranging in assets acquired per company from $15,000,000 to $40,000,000.  And equity per company from $6,000,000 to $16,000,000, with Stephens family affiliated investment companies providing a significant portion of that equity.

Market Segments
The Firm’s main focus is in acquiring industrial and R&D properties in the greater Bay Area.  This includes north to Petaluma, east to Livermore, and south to San Jose.  We will also invest in the Central Valley and Sacramento areas in residential land development opportunities.