Goals & Strategy
Investment Approach
The principals of Dominion Partners believe that they have developed a systematic approach to each stage of the project investment cycle, including sourcing opportunities, due diligence and selection, project analytics and, ultimately, project disposition.
Project Sourcing
Opportunities are sourced through Dominion Partners’ significant referral network, as well as from unknown parties who seek out Dominion Partners based on its reputation, industry relationships and experience. The Manager has classified the following Project sources, among others:
- Lenders – The Manager believes that financial institutions may be sources of both distressed as well as fundamentally sound but undervalued Projects to evaluate for investment.
- Brokers – Dominion Partners’ real estate brokerage relationships across the Western United States have historically yielded a constant flow of investment opportunities to evaluate, including unlisted properties that have not yet come to the open market. The Manager believes that these relationships may continue yielding Projects to evaluate.
- Property and Land Owners – Dominion Partners maintains contacts with property and landowners seeking to sell assets to or joint venture with Dominion Partners.
The Manager also intends to aggressively investigate desirable markets and make direct, unsolicited contact with owners of properties that are not “on the market.” It also may utilize direct marketing strategies consisting of e-mail, direct mail, trade shows and advertising in trade market publications. This approach would target owners and developers that may be interested in selling, and encourage them to submit their property directly to the Manager for consideration.
Due Diligence and Selection
The volume of real estate projects that Dominion Partners consistently evaluates requires streamlined pre-acquisition site, market and financial feasibility analyses. Initial screenings are performed with the goal of identifying and eliminating from consideration opportunities that do not meet certain minimum requirements. Dominion Partners utilizes a combination of criteria that comprise the requisite characteristics a prospective property must exhibit to warrant further review and to filter prospective opportunities. Properties successfully passing through this phase enter an extensive pre-acquisition review, the goal of which is not only to assess acquisition value, but also to commence ownership and management activities with a thorough understanding of the asset.
Dominion Partners’ rigorous due diligence process seeks to identify what management believes to be the most profitable projects in which to invest. In addition to the traditional physical and legal review of property characteristics, the Manager will review fundamental market factors, including sale and rent trends, demographics, government policies regarding residential and commercial development, proposed future roadway and other infrastructure improvements and other factors that affect short and long-term valuations.
Specifically, the Manager’s individual property market study will consist of, among other things, a full demographic report, postal counts, traffic counts, and a trade Dominion Partners retailer map. Demographic reports will feature population, income, age, sex, ethnicity, daytime population, housing stock, marital status, education levels, job categories, housing values and a breakdown of consumer expenditures. The trade Dominion Partners retailer map will show all retailers that fall within a specified radius of a subject property and will be used, in the case of income producing commercial properties, to show prospective tenants where their competition is located. Traffic counts will provide an idea of a property’s visibility and exposure. Postal count data, which will be provided by the United States Postal Service, will provide information regarding the number of households in a potential development Dominion Partners. This research will present variables that the Manager expects to be useful in determining the ultimate success of the Partnership’s Projects.
If a property falls within the Partnership’s eligible criteria and is well positioned in the market, then we will perform financial analyses on the property utilizing real estate modeling software. The financial modeling typically will include determining required construction and capital expenditures and forecasting ultimate sales prices and, in the case of income producing properties, evaluating the credit of existing tenants, determining market rents, forecasting the ability to lease vacant space, reviewing operating expenses and establishing other relevant underwriting assumptions. Based on the financial return objectives of the Partnership and the underwriting assumptions utilized, a targeted acquisition price for the property will be established.
The Manager will then evaluate the underwriting results and determine whether to discontinue the process or proceed with the pursuit of the investment. Upon approval of an investment, the Partnership will proceed to purchase contract execution and lead the due diligence team through the underwriting process, moving through the inspection period and towards the closing of the transaction.
Once a Project is selected, the Project analysis process is principally broken up into four phases, with underwriting and acquisition being the first phase and, if applicable to a particular Project, construction, leasing and/or property management constituting the other three phases.
Market Composite Analytics
Market Action Indicators Indexing System (“Market Composite Analytics”) is the powerful proprietary software. This proprietary forecasting software analytics system combined with management’s expertise and experience creates a powerful competitive advantage for the Partnership.
The Market Composite Analytics aggregates data from multiple weighted, verified and original sources. Then, proprietary analytics mines data down to zip code even neighborhoods . With this software tool, the Partnership is able to conduct short and long term forecasting combined with management’s expertise to help make faster informed decisions on projects
Some of the major global funds and private equity firms utilize their own proprietary analytics software, which may take into account some of the forecasting components of Market Composite Analytics. This system is specifically conceived to assist in both acquisitions and dispositions of real property. Some of the analytics include days on the market for active listings, median price, inventory, pending sales, locked loans, and or new applications (mortgage data), moving companies migration indicators, employment statistics by zip code, housing starts, new home sales, applications, and permits, disposable income, consumer confidence, notices of defaults and trustee sales, shorts sales data, and interest rates, This technology empowers the Partnership to make faster and more informed decisions, particularly in cases of trustee sales and REOs.
Underwriting and Acquisition
During the underwriting and acquisition phase, the Manager will attempt to vet all of the potential issues surrounding the Project and formulate a clear strategy to maximize its value. The goal of this process is to position the Partnership to quickly and efficiently begin the construction, leasing and/or property management phases of Project, if and as applicable, or begin analyzing the market to find what the Manager believes to be the right buyer for the Project if the Manager believes that a quick disposition following acquisition is advisable for the Partnership and the Partners.
During the underwriting and acquisition phase, the Manager will assemble a Project team of experienced real estate industry professionals covering all of the disciplines that underpin the remaining stages of the investment life-cycle. The Project team will aim for efficient execution as the Project moves through, as applicable to the Project; government approvals, user procurement, site planning and design, horizontal and vertical construction, leasing property management and disposition phases of the investment life-cycle.
In addition to a team of outside service providers, the Manager will also have at its disposal in‑house staff of due diligence, financial analysis and development professionals.
Construction
If applicable to a Project, the Manager’s construction team becomes actively involved during the underwriting and acquisition phase of the Project, during which time it vets the financial assumptions pertaining to construction costs and schedules. After the Project is acquired, the construction team refines the pre-acquisition budgets, and schedule and assembles a construction bid package. The Manager also intends to explore bulk acquisitions, and other cost-saving strategies related to construction.
Leasing
Dominion Partners and its management team have established extensive relations with some of the nation’s top commercial brokers. For Projects, if any, acquired by the Partnership and to be leased, whole or in part to third parties, the Manager expects the Partnership to benefit from the expertise of Dominion Partners in assembling a leasing team.
Property Management
If applicable, the Manager may provide property management services with respect to one or more income producing Projects, drawing on the experience and expertise of Dominion Partners’ property management professionals in an effort to benefit the Partnership. The Manager may alternatively choose to engage local or regional property managers for this purpose. However, it is anticipated that an officer of the Manager will lead an in-house team to oversee the performance of all outsourced property management functions – e.g., lease administration, property maintenance and property reporting – and that this oversight function will include, at minimum, frequent reviews of each applicable income producing project.
Project Disposition
The final stage of the investment life-cycle is Project disposition. With Dominion Partners’ proprietary database of more than 100,000 potential buyers’ agents of real estate assets, the Manager expects to have the ability to quickly locate buyers in any type of market conditions. Prior to the disposition of a Project, the Manager will assess the market to determine what it believes to be the right buyer for the Project in light of prevailing market conditions. The Manager will attempt to actively match targeted property types with potential buyers, domestically and internationally, public and private, for the greatest possible reach to generate the highest possible returns with the best execution.
Investment Period and Partnership Term
The Partnership may invest and reinvest its funds in existing or new Projects for up to 3 years after the Final Closing. The General Partner will wind-up and liquidate the Partnership on or before the fifth anniversary of the Final Closing, unless extended by the General Partner, in its sole discretion, for up to two consecutive one-year periods.
Use of Leverage
The Partnership at its sole discretions reserves the right to leverage its investments using recourse and non-recourse mortgage financing. If the Partnership exercises such right, the Partnership will not incur debt financing that would cause its total debt to exceed 50% of its total portfolio value based upon available third party appraisals and the Manager’s internal valuation methodology. However, changes in the value of the Projects over time could cause the Partnership’s debt-to-total assets ratio to exceed or be less than the 50% threshold described above, and the Partnership will not be required to refinance any indebtedness, dispose of a property or take any other actions to reduce its debt-to-total assets ratio to below the 50% threshold in the event of a decrease in the overall fair market value of its Projects following its most recent acquisition.
Joint Ventures; Affiliated Transactions
The Partnership may enter into joint ventures or co-invest with third parties and/or affiliates to diversify the Partnership’s portfolio, reduce its risks, and maximize the investment benefits of the Partnership and the investment partner. In certain cases, the Partnership may enter into ventures with parties having particular expertise in specific asset classes. Except in the case of joint ventures or co-investment projects with affiliated parties (as described below), the terms of a joint venture or co-investment project may provide distributions of cash or other assets to the Partnership’s joint venture or co-investment partners which are preferred to those of the Partnership. In selecting joint venture or co-investment partners, the Partnership expects to analyze the experience of the partner (including relevant track records for prior projects), the strength of its management team and the level of capital invested or committed by the partner.
The Partnership may pursue investments through joint ventures or other strategic relationships with affiliated parties such as other funds, real estate investment trusts and other investment vehicles which Dominion Partners may establish, sponsor or otherwise become affiliated with from time to time in the future. In the case of a joint venture or other strategic relationship between the Partnership and an affiliated party, the Partnership will invest in the underlying Project upon the same terms and conditions as the affiliated party, with such investments to be treated pari passu with respect to each other, and the costs and expenses of the Project will be allocated among the Partnership and the affiliated party in proportion to the capital contributions made by each entity. Further, the Manager will not receive duplicate fees in consideration for its services with respect to the underlying Project, even if the Manager (or an affiliate of the Manager) also serves as the manager or similar position; of the affiliated party. Any joint venture or other strategic relationship with an affiliated party will be established solely for new investments and not with respect to real estate assets previously owned by the affiliated party, subject to the following limited exception. If a current joint venturer or other strategic partner of an affiliated party is in financial distress or otherwise is incapable of continuing its involvement in the joint venture or other strategic relationship, the Partnership may purchase the joint venturer or other strategic partner’s interest in such venture so long as the Manager determines that the investment is suitable for the Partnership, no portion of the purchase price is directly or indirectly paid or distributed to the affiliated party and the other restrictions relating to affiliated transactions and joint ventures (i.e. no duplication of fees, pari passu relationship) are observed.
The Partnership is restricted from selling or disposing of a Project to an affiliated party except for sale or other dispositions which occur after the date that is two years and nine months after the Final Closing and supported by an independent MAI Appraisal.
Distinctive Competencies
Experienced Team
Strategic Approach
Dominion Partners focuses on maximizing risk-adjusted returns by relying on a fundamental value approach to investing. Dominion Partners discerns value and risk across key markets and product lines and accordingly selects the most attractive investment opportunities within the prevailing market environments.
Extensive Relationships
Dominion Partners has and continues to build broad-based, substantive industry relationships with operating partners, advisors, agents, lenders, investors and corporate/institutional owners of real estate.
Proprietary Deal Flow
Dominion Partners believes that it has a reputation for integrity, reliability, creative problem-solving and performing under limited time constraints. This reputation, partly built on the continuity and longevity of its relationships, is expected to continue to generate attractive off-market investment opportunities.
Asset and Portfolio Management
Rockpoint aggressively manages its real estate at the property level, actively monitors its portfolios (making adjustments as appropriate) and uses the capital markets to access the most cost-effective capital available to optimize asset and portfolio risk-adjusted returns.
DYNAMIC Alignment of Interests
Dominion Partners is a privately-held real estate investment company which makes meaningful co-investment equity contributions alongside its investors. Dominion Partners also structures senior professionals’ compensation to be reliant on the successful performance of its investments.
Institutional Reporting and Risk Management
Dominion Partners has dedicated and experienced professionals who focus on risk and liability management, accounting and financial reporting that yields the utmost transperency.
