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Company Overview
The principals of TCP Realty have utilized
a number of affiliated companies such as TCP Holdings, LLC and TCP
Realty Services, LLC, (“TCP” private commercial real estate investment
and service companies) to specialize in value-added opportunities. TCP
was formed in 1985 and its Managing Directors are Robert Neely, David
Thomas and Rubin Kremling. Since its formation, TCP has been actively
acquiring, managing, repositioning, and selling real estate assets.
TCP Realty Services, LLC is a TCP
affiliated company providing property, leasing, construction and asset
management, as well as acquisition, disposition and brokerage services.
Robert Neely in his role as Chairman and Chief Executive Officer
oversees the development and implementation of the Company’s strategy.
David Thomas in his role as Chief Investment Officer leads the
acquisition and asset management teams. Rubin Kremling is Senior Vice
President of TCP Realty Services, LLC and leads the property management,
construction and leasing team.
Investment Expertise
TCP specializes in the investment,
acquisition, and value enhancement of underutilized office, retail, and
industrial real estate. Chief Investment Officer David Thomas has guided
TCP in the involvement in 63 projects totaling approximately 6.1 million
square feet costing $230 million in the aggregate to date.
Management Experience
TCP’s professionals has provided
management services for 119 properties representing over 11 million
square feet of office, retail, apartment, industrial and multi-use
space. TCP Realty Services, LLC provides management and leasing services
for all of the Company’s properties. By implementing an aggressive
pursuit program to attract and retain tenants, TCP has excelled in the
management and leasing business. The properties managed by TCP Realty
Services, both for its own account and for third parties, have
experienced dramatic economic improvements under TCP’s stewardship.
These improvements have taken the form of occupancy increases, operating
expense savings and renovation.
Investment Perspective
Alignment of Interests - The Company
strives to structure investments so that the incentives of all parties
are aligned with the common objectives of investors. The Company
typically co-invests in its transactions in order to share investment
risk with its investors.
Value-Driven – TCP approaches each
investment based on a value-oriented underwriting of a particular real
estate asset. In the underwriting process, the Company focuses on
non-speculative valuation parameters including current market
conditions, in-place cash flow, and prevailing comparable trading
activity.
Negotiated Transactions – TCP Realty
generally focuses on privately negotiated transactions where the complex
structuring experience of the principals may be brought to bear.
Planned Exit Strategies - Investments
pursued generally contemplate a planned exit strategy within anywhere
from two to seven year time frame. Such exit strategies are based on
prudent valuation methodologies without speculating on asset
appreciation or market driven income growth.
Financial Structuring – TCP Realty
seeks creative ways to structure transactions, which optimize investor
returns while limiting downside risk.
Corporate Structure and Personnel
The Company’s business activities are
conducted by a highly motivated team of professionals from offices
located in Dallas and Houston with satellite offices in Austin and San
Antonio, Texas. These offices oversee portfolio acquisitions in their
respective markets. This places personnel in close proximity to the
principal investment markets in Texas and Louisiana. The Company is
headquartered in Dallas with the investment office and the leasing and
management division located in Houston. The Houston office oversees the
management of all the properties.
TCP provides investment expertise and
investment management professionals that are well positioned to take
advantage of today’s real estate and capital market environments. The
markets require an increasing degree of investor sophistication as the
real estate industry further matures and consolidates. TCP’s investment
and management professionals have years of integrated experience in real
estate, capital markets, investments and property management.
Culture and Values
The principals of TCP Realty have
worked together for over 20 years. They have complementary talents ands
skills, which balance creative energy and bottom-line performance. Over
the years they have incorporated within their organization a philosophy
that drives the business and perpetuates their successes. They maintain
a focused and disciplined investment approach, which is sustained by the
sole objective of maximizing returns and minimizing risks to investors.
The Company relies on its mission- driven strategy and planning and uses
strategic and tactical teams comprised of key personnel in all phases of
its business. This TCP philosophy is characterized by:
• Commitment to Partners, Customers and
Employees • Leadership in Identifying Investment Opportunities • Value
Enhancement of Acquired Properties • Quality Service Organization
TCP’s Track Record
TCP Realty’ principals, Robert Neely,
David Thomas and Rubin Kremling have a successful track record of
investment in retail, office and industrial/mixed use income properties
in the Dallas, Houston, San Antonio, and Austin markets as well as Texas
secondary markets such as Lewisville, Huntsville, Humble and Richardson
and Louisiana markets of Baton Rouge and Leesville .
When TCP was founded in 1985, the
company relied on equity funding primarily through friends and family.
Over the years, 26 projects were acquired as some 90 individuals
collectively invested in these projects. This became TCP’s private
equity investor group.
In the late 1990’s TCP identified a
number of larger projects requiring more significant equity investments
and the company turned to the institutional market to fund these larger
transactions. Over the years, an additional 35 properties were funded
primarily by TCP’s institutional clients. These institutional clients
included Apollo, ING, CSFB-Praedium, Lone Star, and Cypress.
From 2005 on, TCP has focused solely on
retail projects, as it believes that in the current stage of the cycle
the office sector possesses serious negative traits that increases the
downside of the value added investment play.
During a period of sixteen years (from
1990 to 2006), TCP partnerships invested in 63 properties located in
Texas and Louisiana, which represent aggregate purchases of $238
million. To complete these investments, $112 million of equity capital
was invested. As of 12/31/06:
• TCP and its affiliates’ partners
(institutional and private equity) invested over $230 million of total
debt and equity capital to purchase 65 properties.
• TCP’s private equity controlled
properties comprise over 100 individuals investing $37 million of equity
in 30 properties and receiving $86 million in distributions.
• TCP private equity controlled
properties have achieved actual returns of 36% per annum and proforma
returns of 33% per annum on average.
• In the 35 TCP Institutional’s
properties, equity investment totaled $75 million.
TCP Acquisition Focus and Structures
In most cases, prior to acquisition,
these properties were distressed or otherwise under-performing. These
acquisitions offered TCP Realty an opportunity to improve economic
performance through strong management, improved operational controls,
and aggressive leasing. In other cases, properties were purchased at
favorable prices and provided a strong cash flow yield on the initial
investment. The matured properties individually and as a group have
experienced dramatic economic improvements under the Company’s
stewardship.
TCP Realty has primarily invested
through two different structures. The Company partnered with three New
York and one Dallas institutional groups to acquire 3.3 million square
feet in 35 office, retail and industrial projects. Private equity
partnerships controlled by TCP acquired the remaining 2.5 million square
feet in 26 projects.
The TCP’s private equity controlled
purchases totaled $83 million and required $31 million in equity
investment by the Company and its investors.
The vast majority of TCP’s previous
investments have been sourced through its unique network of
relationships. Consequently, it does not rely solely on traditional
referral channels for deal flow. TCP Realty does not take a passive
approach to real estate investing as it assumes a lead role in
transactions. The Company believes that compelling investment
opportunities exist for superior risk-adjusted returns through
investments in real estate related assets in the Texas, Louisiana and
surrounding markets.
TCP maintains a keen interest in the
local and national real estate factors to gauge the costs/benefits of a
timely sale. In 1997 and 1998, TCP sold its entire Dallas office
portfolio due to concerns of overbuilding in the market and obtaining
attractive sale prices. TCP proposed selling all but one of its Houston
office investments in 1998, but due to the delay of decision of a major
institutional investor, was not able to get the package to market in a
timely manner and lost the opportunity.
In addition, TCP follows the
debt/capital markets to gauge appropriate times to refinance project
debt. TCP successfully completed twenty refinancings totaling $111
million during the low interest years of 1998 to August 2004.
TCP Private Equity Track Record
Seventeen of the TCP’s private equity
controlled projects were sold by 2003 for a total of $124 million. To
date, $81 million has been distributed from the TCP’s private equity
partnerships, far surpassing $35 million equity investment. The
projected current equity in the remaining projects is $27 million, based
upon TCP’s estimates of market value, yielding an internal rate of
return of over 30%. TCP has also successfully refinanced 21 projects
(some more than once), yielding $135 million in gross proceeds.
Equity Partners Capital Invested
TCP has attracted $111 million of
equity capital from seventeen private syndications, three TCP sponsored
funds and four significant institutional investors. The equity capital
investment with TCP is reflected below (amounts include TCP affiliates
investments with each noted partner):
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