Adelante’s primary investment focus is the value of the underlying real estate assets ( or “Net Asset Value”) of each company we include in our real estate securities portfolios. We conduct exhaustive real estate market research and dissect company income statements, balance sheets and cash flow statements to identify the components of underlying Net Asset Value. We evaluate macroeconomic trends, real estate securities transaction activity, potential for organic growth of local real estate markets and sustainability of real estate income streams. Additionally, we will perform proprietary sensitivity analyses detailing the impacts of changes in interest rates, loan-to-value and debt service coverage to assess financial risk of our real estate investment portfolios, which might cause increases or decreases in Net Asset Values.
Adelante’s experienced real estate investment team, with 86 years of public and private real estate investment experience combined, closely evaluates the management of our portfolio companies both subjectively and objectively. We strive to meet with company management teams at least twice a year to review their business strategies and operating procedures. As an objective measure, we are constantly monitoring each real estate security’s return relative to its peer group in order to invest in the best REITs and real estate equities.