A Targeted Investment Strategy
The Lightstone Value Plus Real Estate Investment Trust's acquisition parameters require immediate cash flow at a level high enough to both satisfy the current return requirements of its equity partners and provide funds necessary for capital improvements to the properties. This involves several specific, carefully targeted goals:
Acquire properties that will generate immediate cash flow. These properties must also offer this upside potential for increased cash flow through operational improvements, asset repositioning and reasonable capital improvements. Since the Trust does not develop new properties, investors will not wait years for cash flow to begin.
Look for attractively priced individual properties in markets with good economic potential, improving real estate fundamentals and supply constraints that make new development difficult.
Utilize leverage where a spread between interest rates and in-place property cash flow exists that can provide economic benefits to investors. The portfolio may be leveraged up to 65-75% of fair market value.
The Trust intends to hold properties for a minimum of seven to ten years. At which point the board of directors may decide to sell the properties to another real estate entity or to list the Lightstone Value Plus Real Estate Investment Trust on a national stock exchange.