Fundamental value approach
BMC focuses on investing in properties with strong intrinsic value characteristics. This means acquiring properties at values which are a discount relative to replacement cost and possessing the qualities necessary to produce strong stabilized cash flow even in periods of market uncertainty. BMC avoids opportunities where key value drivers are potentially unstable or not real estate based. BMC evaluates properties on an unleveraged basis based on the quality of the real estate and market position and then structures the investments to optimize returns under a conservative evaluation of financial risk to allow an investment to withstand market fluctuations.
Geographical, property type and capital structure diversification
The ability to invest across property types, in different markets, and under varied capital structures is central to BMC’s investment strategy. This allows BMC to maximize risk-adjusted returns by responding to market cycles which do not align across property types while providing BMC with greater context to evaluate the merits of a given investment against a more diverse opportunity set.
BMC targets the following broad categories of real estate investments: (i) stabilized long term value plays (ii) value creation opportunities, (iii) distressed/restructuring opportunities.
- Stabilized long term value plays. BMC identifies property types and locations which offer long term potential for rent growth, asset appreciation, and stable operating performance, and then structures investments to mitigate the downside risk of real estate cycles and changing macroeconomic conditions.
- Value creation opportunities. These opportunities may include situations in which an investment’s basis compares favorably to its potential value once repositioned. These also may be opportunities where there is the potential for near-term improvement in cash flow through active asset management.
- Distressed/restructuring opportunities. These opportunities can be situation-specific, derived from opportunities created by in-place ownership and capital structures requiring infusions of liquidity or restricting expertise; or systemic, resulting from a buying opportunity created by dislocation in markets.
BMC also believes in full alignment of incentives across the team. BMC’s integrated team of principals invests alongside our partners in each deal and brings a hands-on approach to work closely together to successfully execute on an investment strategy.
The BMC team brings extensive real world experience and continually seeks new opportunities that fit our investment criteria.