The investment strategy of The Petrus Group is to acquire assets priced below $30 million in a wide range of real estate product types. This particular niche in real estate is "below the radar" of most real estate investment funds, including vulture and hedge funds; it also does not attract public or private endowment funds. This niche is a very active segment of the market, attracting private individuals, foreign investors and small local investor groups.
As the assets appreciate in value and income, the Group will refinance and return all or most of the initial investment back to the investors and continue to own the assets and receive additional cash flow. From time to time, it may be opportunistic to sell assets, in which case the net proceeds will be returned to the investors, less 20% of the appreciation in the property. Generally, refinancing occurs within a 3-7 year time frame; sale of assets may occur at any time. The table below summarizes our current investment targets.
| Product Type |
Price Range |
% of Fund |
| 1. |
Industrial/Flex |
$ 1M - 5M |
20% |
| 2. |
Commercial Office |
$ 1M - 10M |
25% |
| 3. |
Retail Centers |
$ 2M - 20M |
40% |
| 4. |
Land |
$ 0.5M - 10M |
15% |
It should be understood that the table above represents target investments only. Actual investments will vary based on opportunities in the marketplace.
Land assets represent a buy and hold scenario. The Group will acquire these assets at deep discounts and move quickly to dispose of them to local builders and developers once the market strengthens. We anticipate this will take 2 to 5 years.