Our focus is deep-value net lease investing alongside selected operating partners. We examine the value present at acquisition, the work that may unlock additional value, and the judgment of the person responsible for that work.
Six questions guide our evaluation.
1
What makes the entry price attractive?
We compare the price with our own assessment of the land, the improvements, and the rent the property can support.
2
What work is needed, and who can execute it?
Identify the lease or operating work the investment depends on, then examine the operator's relevant experience and how they intend to carry it out.
3
What must go right for the investment case to hold?
We examine the rent assumptions, the cost of the work, and the price of the land and improvements. Those assumptions have to be credible against the property and its market.
4
What happens if the work takes longer, costs more, or produces less than expected?
We consider the property if the plan is delayed or falls short, including vacancy, re-leasing, and carrying costs.
5
Who arranges the financing and signs on the debt?
We generally prefer the operating partner to sign on the debt. Other arrangements can be considered as part of the overall transaction. Rooster provides equity; it does not offer loans or guarantees.
6
What would make us extend diligence or walk away?
We look for reasons the investment may not work. If key assumptions change, we are willing to pause, extend the diligence process, or stop.
Character, Capital, Compounding
A track record does not tell us how it was built.
We want to understand the risks an operator accepted, the opportunities they declined, and how they behaved when plans changed.
Character
What happens when the plan changes?
We listen for operating detail, responsibility, and candor about problems. How an operator treats partners, suppliers, and tenants matters alongside the record.
A decision to pause
On one transaction, a partner paused closing when key assumptions no longer held. The contract was extended for further diligence. Being willing to stop was part of the judgment we valued. Concealing a known problem or proceeding on information known to be wrong would undermine that trust.
Capital
Does the next investment justify the capital it requires?
A capable operator can still make poor capital decisions. We look at what growth requires, the downside it introduces, and whether the operator understands those trade-offs.
Growth and repeatability
When considering where to allocate capital, we weigh whether an opportunity can be repeated and whether the operator is disciplined about the capital that growth consumes. Making a business larger is not sufficient on its own.
Compounding
What can the next decision build on?
Working together can deepen our understanding of an operator, a property type, and a market. We look for relationships where that knowledge can inform future investments.
How relationships become opportunities
A broker relationship has introduced opportunities involving capable buyers who needed additional equity. Working with capable operators can also lead to introductions to others. Each opportunity still needs its own evaluation. Here, compounding refers to knowledge and relationships, not a promise of investment returns.
An equity partner for operators who want to keep operating.
Some operators prefer property work to fundraising. Others already have investors and need additional equity for a particular opportunity.
We raise and allocate capital ahead of individual opportunities, so we can focus on the operator, the property, and the decision.
Our fund is designed to serve as the sole equity capital partner for selected operators and to provide the remaining equity in transactions led by other sponsors. We evaluate the investment, provide equity, and participate in major decisions. The operating partner leads execution and ordinary property operations.
When timing creates opportunity.
An operator or syndicator can have a compelling investment and still need equity to complete it. Our fund is designed to organize capital ahead of individual transactions, so a new opportunity does not require a new capital raise.
When timing matters, the ability to provide equity promptly can create room to negotiate more attractive terms. The investment still has to meet our standards.
This flexibility is an advantage of the fund's intended design. Any investment depends on available capital, diligence, and transaction readiness.
Who does what.
Under our current model:
WorkOperating partnerRooster
Opportunity and ordinary operationsOperating partnerSources the opportunity and leads ordinary operationsRoosterEvaluates the operator and investment case
Capital and financingOperating partnerArranges financing; generally preferred to sign on the debtRoosterProvides equity and does not sign the loan
Sale, refinancing, and major leasesOperating partnerParticipates in major decisionsRoosterParticipates in major decisions, subject to transaction documents
ReportingOperating partnerSupplies operating informationRoosterCollaborates on investor communication and reporting
Debt responsibility is part of the operator's accountability. It does not guarantee investor principal or investment results.
Each partnership can inform the next decision.
Work together with clear responsibilities.
Observe how the operator responds and how the property and market behave.
Build knowledge and relationships that may introduce further opportunities.
