Approach Opportunity For RIAs
The Edge Westlake Apartments 915 B Street Carson Aire Rockefeller
Our History Culture & Leadership Team Advisory Board
Sign Up Analysis & Resources Articles & Press Durable Value Podcast What We're Reading

 What We Do

“Visionary companies use the genius of the AND—experimenting and developing—while still adhering to the core ideology.”

– Jim Collins, Good to Great

rockefeller-Artboard 1-100.jpg
DJI_0590.jpg
 

what we do

We Invest in Industrial Parks and Apartments in Inefficient Secondary and Tertiary Markets

Graceada Partners has a vertically integrated team of 75+ professionals focused on creating value in industrial parks and apartment real estate.

Industrial parks and apartments are two of the most recession and inflation resistant asset types. Secondary and tertiary markets are perhaps the last large non-institutional segments of real estate. With $1.6 trillion of apartment and industrial real estate in secondary and tertiary markets, this is a large, mature, and inefficient market.

 Our Process

 

Focus on Attractive Markets

  • Long-term population growth

  • Relative affordability

  • Supply-constrained

  • Quality of life

Build Robust Deal Pipeline

  • Establish broker relationships

  • Build off-market deal flow

  • Underwrite multiple properties

  • Selectively invest in attractive properties

  • 3-18 month timeline from underwriting to acquisition

CapEx Improvements

  • Cure deferred maintenance

  • Renovation of units

  • Additional or upgraded amenities

  • Exterior improvements

  • 6-12 month timeline

Bring Rents to Market Rates

  • In place rents are typically 20-40% below current market rates due to less professional management

  • Actively work through the rent roll to renew leases at current rates, greatly improving cash flow

  • 12-36 month timeline

Exit

  • Typically 3-5 year holding period

  • Increased liquidity due to disciplined deal size

  • Potential buyers include existing market of private stabilized cash flow buyers

 

 Vertical Integration

Increased control and transparency that results in reduced risk and greater returns

 

Asset Management

Graceada professionals have experience from Shorenstein, Buzz Oates, JLL, CBRE, Prometheus, and REOCs, as well as designations including CCIM and CPM. Graceada utilizes industry leading asset management software, such as ARGUS and RealPage.

 

Construction Management

Graceada has 50+ years of combined experience in construction management and maintains EPA universal designation and multiple specialty contractor licenses, including HVAC and landscape.

 

Property & Fund Accounting

Graceada professionals have experience from John Hancock Farmland (pension investing), Moss Adams, Pulte Homes, and REOCs, as well as designations such as CPA. Graceada utilizes industry leading property and fund accounting software, such as Juniper Square and Yardi. Each fund receives an annual audit by a third-party audit firm.

 

Property Management

Graceada has more than a decade of third-party property management experience, managing some of the largest assets in the regions. They are an Accredited Management Organization with the Institute of Real Estate Management. Graceada utilizes industry leading property management software, such as Yardi, Voyager,and Building Engines.

rockefeller-Artboard 1-100.jpg

Institutional Expertise

Graceada Partners employs institutional expertise and industry best practices to inefficient markets.

Experience

  • John Hancock

  • Shorenstein Properties

  • JLL

  • Blackstone (Osso)

  • Prometheus

  • CBRE

  • Buzz Oates Companies

  • Townsend Group (Alliance)

  • AndCo Consulting (Alliance)

Strategies + Practices

  • Dynamic Rent Pricing

  • Building Systems AI

  • Technology-Enabled Leasing

  • Green Auditing

  • Proprietary AI & Data Driven

  • Acquisition Process

  • Energy Efficiency Audits

  • Vertically Integrated

  • Third Party Valuations

  • Audited Fund Financials and GAAP Accounting

  • Institutional IT Best

  • Practices: MFA, firewall, secondary email protection,

  • IT security training

  • Segregation of Duties

  • Human Resources and Risk Management

Proptech

  • HANK.AI: HVAC system optimization & indoor health

  • RealPage: dynamic rent pricing and asset performance optimization

  • Aquicore: Energy efficiency

  • AI to identify opportunities, mitigate issues & achieve energy reduction goals

  • Building Engines: commercial tenant communication and vendor work order management

  • VTS: Commercial market lease analysis & lease management

  • Esusu: Rent payment reporting to help residents build credit

  • RentCafé: residential tenant and applicant portal

Environmental Sustainability

  • Water Consumption AI

  • Energy Efficiency AI

  • EV Charging Stations

  • Green Auditing

  • Energy Star Portfolio Manager (ESPM) and CA Benchmarking

  • Solar Energy Systems

  • Building Systems AI for Indoor Health & Air Quality

  • LED & Other Energy

  • Efficiency Retrofits

  • Outdoor Amenities

Tools + Designations

  • Juniper Square

  • Yardi Systems

  • Argus

  • Costar

  • Certified Property Manager (CPM)

  • Accredited Management

  • Organization (AMO)

  • Certified Public Accountant CPA)

  • Certified Commercial Investment Member (CCIM)

  • Environmental Protection Agency (EPA) certified

Service Providers + Affiliations

  • Paul Hastings (legal)

  • CohnReznick (auditor)

  • Alliance Global Advisors (institutional advisor)

  • Marsh McLennan (insurance)

  • IREM

  • PREA

  • PREA Foundation Supporter

  • NAREIM

  • iREOC (Institute for Real Estate Operating Companies)

  • TEXPERS (Texas Assn of Public Employe Retirement Systems)

  • SACRS (California State

  • Assn of County Retirement Systems)

 
 

 Historical Deal Flow & Selectivity

Evaluated over 700 Properties Representing $10 Billion in Deal Flow

The Firm is extremely selective and has only purchased about 5% of what it has evaluated.

Executed on 53 Properties, Representing

Approximately $590 Million in Value

 
rockefeller-Artboard 1-100.jpg

 Active De-Risking of Investments

Graceada’s leadership team has collectively managed over $10 billion in assets across all four property types through the last three decades of market cycles. The Firm was founded in December 2008 and spent its formative years in the Global Financial Crisis, managing distressed assets for foreclosed borrowers, special services, and special assets teams. This experience and the leadership team’s prior experience was foundational in how the Firm invests and mitigates downside risk.

The three core principles the Firm focuses on are:

 

Buy Well

One of the best mitigants to risk is buying properties well. This is why Graceada focuses on a proprietary pipeline of off-market investments. This allows the Firm to negotiate on a one-buyer-to-one-seller basis versus a bidding, competitive environment. Because, on average, Graceada purchases one property for every 20 evaluated, the Firm is able to identify value relative to the market.

 

Acquire with Conservative Debt

From experience gained in the Global Financial Crisis, Graceada has always had a preference for fixed rate date and conservative leverage from balance sheet lenders. Graceada avoids the use of bridge and securitized debt when possible. Current Graceada portfolio-wide leverage is 55%.

 

Add Value Quickly

The fastest way to create margin of safety in an investment is to grow net operating income (NOI) and cash flow. This effectively de-levers the investment and provides optionality on sale versus hold. Graceada focuses on acquiring properties where the Firm can quickly grow NOI. On average, NOI growth begins to occur in the Firm’s properties within the first three months of acquisition. The Firm’s vertically integrated team is adept at quickly adding value to investments and growing margin of safety.