Investing Methodology — Specifics

While we don’t depend on aggressive financing to buoy imprudent investments or position ourselves in the capital structure of properties we wouldn’t want to own outright, we do regularly use strategic structuring practices to enhance our position in an investment.  Some examples of how we capitalize upon our structuring expertise are listed below:

• We make it a general policy to pro-actively manage the downside risk we take in our investments by capitalizing our properties with an average 65% loan/value ratio.  We believe this allows us the flexibility to ride out potential downside fluctuations by building in the opportunity to recoup value if an asset performs below expectations.
  
  
• We understand how and when to use preferred equity, structured debt, and promoted minority positions to balance ownership inequities and enhance our position.  In doing so, we are able to take advantage of investment positions that would otherwise be unavailable.
  
  
• In capitalizing our investments, we carefully consider our strategy for each property before seeking financing for that asset.  In doing so, we seek the kind of financial structure that best matches our strategy and also enables us to build in flexibility for unforeseen conditions.  By linking our financing practices with our strategy, we significantly increase the probability of achieving our objectives.

Through these and other examples of our approach to investment structuring, we are constantly striving for consistency in delivering what we say we’re going to deliver.