We focus on “A” assets in “A” markets managed by “A” people.  Our primary objective is quality.  We have found that real estate performs better over time when it is more difficult to supply, the demand is less cyclical, and tenants are reluctant to leave.  We are heavily over-weighted in real estate sectors that share these four characteristics:

• Oligopoly or Duopoly Sector Structure
• High Barriers to Entry for New Owners/Developers
• High Barriers to Exit for Tenants
• Secular Demand Drivers Underlying the User Side of the Business

The combination of these four characteristics (or some subset) creates a competitive landscape where tenants have few(er) options to move or play one building owner against another.  Properties with these characteristics can command higher occupancy rates and better rents, which in turn may create more valuable portfolios for shareholders through enhanced dividends and higher real estate values.

Our focus on quality is perhaps different than others, who may focus first on valuation.  Buying things just because they are cheap is not our goal.  We would rather have a great asset at a fair price than a fair asset at a great price.