The commercial real estate, more than the residential, is slowly starting to pick up the pieces it shed when the economic crisis struck. And some companies are trying to ride the current commercial real estate rise. That’s exactly what Virtus Real Estate is doing by leveraging a unique investing approach.
Leading real estate private equity firm, Virtus Real Estate is currently investing based on demographic trends. Its current investment strategy emphasizes the role of specific demographic trends and seeks investments that are not tied down to major asset classes like bonds, stocks, hedge funds, and traditional types of real estate. The key trends, which serve as the basis of the firm’s investment strategy, are as follows:
- Baby Boomer Generation’s aging and growth
- Millenial Generation coming of age
- United States’ Hispanic market growth
- transitory nature and decreased job tenure of the American worker
The beauty of Virtus Real Estate’s investment strategy is that the trends being followed will happen whether or not S&P 500 is up or down 30%. Also, the firm’s target sectors are affected less by the current economic bubble and recession.
Before the end of 2010, Virtus Real Estate is adding half a dozen professional to its team to help with the projected growth. The firm is currently gearing up for a series of new funds that will be used to acquire an estimated half a billion dollars worth of real estate.
Virtus Storage Investment III, LP, the firm’s third self-storage fund, closed at the end of September. Once fully invested, the self-storage fund will consist of more than $100 million in properties.
The success of Virtus Storage Investment III, LP, coupled with the success of some investments that produced earnings even during the recession, will result to two more funds in the next 12 months. The additional finds will acquire $400 to $500 million worth of new properties across the United States.
“Our strategy of focusing on fragmented and inefficient real estate asset classes whose demand is driven by major demographic trends has served us well throughout the downturn. Prior to the bubble, we were acquiring properties at an aggressive clip. When we recognized that opportunities fitting our criteria were dwindling due to inflated values, we postponed any new acquisitions for almost two years. Now that values are driven by real in-place income, we see an opportunity to increase our acquisition activity in our core asset types: self-storage, student housing, senior housing and medical office,” said Virtus Real Estate CEO and founder Terell Gates.