Value Added

Properties must offer one or more opportunities to create value which could include lease up, re-lease by moving tenants, build out, expansion on excess land, property rehabilitation, change of use and new construction. In every case the most important criteria is that there be a supportable expectation that the subject property will be in demand by an available supply of tenants in need of space. Moreover, this space must be leasable at rates that provide an acceptable return on investment in light of the attendant risks associated with the investment.

Select Markets

Kennedy will continue focusing investment activities to those supply constrained areas where research supports significant future demand for space. Markets that fit this criteria include the key national transportation centers—or "Gateway Markets"—including Washington, D.C./Baltimore, New York/New Jersey, Boston, Chicago, Seattle, Portland, San Francisco, Los Angeles/Southern California and Dallas. Coupling the broader “top-down” research with our “bottom-up” knowledge of how particular properties behave in certain markets enables Kennedy to deploy capital efficiently, taking advantage of optimal risk/return dynamics.

Development

We have long-standing expertise in new development - having structured more than 200 development transactions in numerous markets including the Gateway Markets mentioned previously. We use a variety of investment structures including equity joint ventures, forward-funding, development service agreements, and construction financing convertible to equity ownership.

Property Type

Investments are made in individual properties as well as portfolios represented by the five basic property types - office, industrial, retail, multi-family and hotel:

Industrial - We prefer bulk storage, assembly, manufacturing and flex space, all with multi-tenant design in markets where pricing is attractive to build and/or buy. Properties must be functional and of sufficient quality to attract a broad range of tenants in the local submarket.

Office - We buy and/or build or redevelop a variety of Class A and B office buildings with emphasis on suburban and/or mid-rise structures. We have significant expertise in the design and development of cost efficient, high performance assets that respond to the needs (fiber optic, power, HVAC, flex floor plans, abundant parking, etc.) of today's employers.*

Multi-family – Our preference is to build or rehab upper-end, mid to high-rise apartment projects in markets that are supply-constrained primarily due to significant physical barriers to entry.

Retail - We acquire need and convenience-based community and neighborhood shopping centers, with emphasis on opportunities to rehab or re-tenant poorly managed centers in excellent locations. We also pursue opportunities to forward-fund (presale structures) new construction in selected "in-fill" and/or high barrier to entry locations.

Hotel - We seek to develop new or purchase existing properties in major U.S. markets that offer repositioning opportunities through renovation and improved management. Our goal is to acquire and reposition assets at prices below replacement costs.

* Please see our article, "The New Suburban Office, Cost Efficient - High Performance", also available in PREA Quarterly magazine, fall 2000, pp. 58-65.