Recent Study Finds Total Economic Impacts Attributed to MEPT Investments Equates to $18.1 billion Over Last 34 Years

MEPT Receives Top Ranking in GRESB Benchmark

During the first quarter of 2017, MEPT acquired Kedron Village II, an 157,185 square foot retail center for a total gross purchase price of $30.9 million.
Kedron Village II is located 30 miles southwest of downtown Atlanta in Peachtree City and is adjacent to an existing Fund-owned asset, Kedron Village I, a 93,356 square foot, grocery-anchored retail center acquired in 2011.


JV Closes on Acquisition of Two Rector Street

Multi-Employer Property Trust (MEPT), advised by Bentall Kennedy U.S. LP, in a joint-venture with Cove Property Group LLC have acquired the office building at 2 Rector St. in New York, NY from Kushner Companies and CIM Group LP…

First look: ‘Transformative’ 710-unit residential project planned in South End
Leggat McCall Properties on Monday submitted an expanded project notification form to the Boston Redevelopment Authority that highlights in greater detail the firm’s plans for a "transformative, contemporary development" spanning a full city block in the South End. The project team has named the project the "Harrison Albany Block" and proposed 710 residential units, a 40,100-square-foot office and 14,100 square feet of retail space for a 3.1-acre site in the South End formerly owned by Boston Medical Center…


Latest look at Trammell Crow’s updated Diridon project
A lot has changed in the years since downtown San Jose’s last office tower was built about six years ago. Tech&rsquos influence on workspace design has completely transformed the look and feel of new projects. Wide-open floors are in. So is proximity to housing, services and transit…



 

FAQ's

What year was the Fund founded?
What is the structure of the Fund and Fund Management?
What investments is the Fund permitted to make?
What is the typical asset holding period?
What is the Fund's on-going asset management role once properties are acquired?
What are the benefits of investing in a real estate strategy involving development or property enhancement?
How does the Fund utilize research?


What year was the Fund founded?
Multi-Employer Property Trust commenced operations on April 1, 1982.
What is the structure of the Fund and Fund Management?
MEPT is an open-end commingled equity real estate fund. It is organized as a bank collective trust, which is maintained by NewTower Trust Company.

MEPT is managed by NewTower Company (NewTower) of Bethesda, Maryland, a Maryland limited purpose, non-depository, state-chartered trust company which serves as trustee, fiduciary and investment manager. Bentall Kennedy (U.S.) Limited Partnership (Bentall Kennedy) with U.S. headquarters in Seattle, Washington, serves as the real estate investment advisor and investor relations provider to the Fund. NewTower and Bentall Kennedy (collectively, the “management team”) work together to execute the Fund's investment strategy.


What investments is the Fund permitted to make?
The Trustee of MEPT has the authority (under the MEPT Declaration of Trust and Participation Agreement) to invest in real estate investments as well as a variety of other investments (e.g. mortgages, stocks, bonds). However, except for its working capital balance which is invest in cash and money market funds, all MEPT investments are real estate-related.

As stated in MEPT's Investor Participation Agreement, real estate investments means improved and unimproved real property, and intestests in real property, direct or indirect, and whether or not income producing; trust and participating certificates; bonds, debentures, mortgages, deeds of trust, securities, options, and notes secured by real property; leases and ground leases; condominiums; interests in corporations, joint ventures, limited liability companies, limited partnerships, or other business organizations to facilitate indirect investment in development of, or holding of title to interests in, or operation of, real or personal property by the Trust; and investments in joint ventures, partnerships, limited liability companies, limited partnerships, or corporations owning, developing, managing, or operating real property as their principal purpose and function.
What is the typical asset holding period?
MEPT typically owns an asset for seven to ten years, but will dispose of an asset if a favorable opportunity occurs. A formal hold/sell analysis is conducted each January after the annual budget has been formalized, but it may also be initiated because of an asset review for a quarterly report or a weekly portfolio meeting. The process of determining whether a property should be brought to market starts with assessing the risk profile of the asset and then estimating the achievable sales price. The disposition analysis is continuous and reported quarterly. Reasons for disposition may include a change in demographic and economic forecasts, real estate market conditions, new competitive product, property lease rollover projections and market conditions for the sale of property.


What is the Fund's on-going asset management role once properties are acquired?
Asset managers are involved with each MEPT project from the beginning: assisting with negotiating and structuring of development agreements, monitoring projects through construction, and overseeing the leasing and property management of each project to stabilization. Asset managers develop strategic plans for each property, visit each property quarterly, and are responsible for identifying initiatives and opportunities that will create value, and increase income, for each property. Asset managers hire third-party providers for property management, leasing and asset sales. With asset managers stewarding properties throughout their life cycle, MEPT's investors can be confident that the portfolio is managed with unparalleled consistency, continuity and thoroughness.

Bentall Kennedy asset managers perform a variety of functions to ensure quality control at the property level. Senior asset managers, in the role of team leaders, coordinate the implementation and integration of asset management functions into the acquisition and portfolio management process by:

  • Reviewing, modifying and approving the property operating and capital budget, and preparing an Annual Business Plan for each asset every year;
  • Overseeing and directly participating in the leasing process (both new and renewal), including, but not limited to, evaluation of lease proposals, analysis of tenant creditworthiness, and negotiation of leases;
  • Managing the development process, along with Acquisition officers, for the creation of new core assets;
  • Reviewing and monitoring the financial record keeping, reporting, and cash management for each property;
  • Managing the implementation of all capital and tenant improvements;
  • Directing the process of and selecting on-site property managers and property leasing teams;
  • Overseeing the risk management program for each property;
  • Directing the tax appeal process in order to minimize operating expenses;
  • Providing direction and reviewing/negotiating relevant documentation for the hiring of various other service providers;
  • Monitoring the user and capital markets vis-à-vis asset life cycle position to optimize timing of sale.

MEPT contracts with third-party property management firms to provide property management services. MEPT asset managers solicit bids from three or four property management firms in the market. Asset managers consider experience, cost, and personnel when making their final selection. Then, asset manager are responsible for overseeing the property management firms to ensure that the property is managed in line with MEPT objectives and policies.


What are the benefits of investing in a real estate strategy involving development or property enhancement?
MEPT's primary investment strategy is to create top-quality, core, income-producing assets through development, rehabilitation, or acquisition and repositioning of undervalued assets. MEPT adds value through development and redevelopment, acquiring core properties by building them at or below replacement cost. The Fund invests in office buildings, warehouses, flex/research and development facilities, retail centers, apartment complexes and hotels in order to maintain a diversified, institutional-grade "core" portfolio. By capturing value relatively early in the life of the asset, MEPT's portfolio produces strong and stable current income.

The Fund makes these investments through a combination of forward commitments and fee- and incentive-based Developer Service Agreements (DSAs) with developers. MEPT's risk management strategy for development projects mitigates the impact of construction risk, market risk, and environmental, legal and other property-related risks. Finally, as the owner, MEPT controls all major decisions in the development process. Incentives to stay on budget and on schedule are typically negotiated into the DSA, as is a lease-up bonus.

MEPT has a state-of-the-art, institutional-quality real estate portfolio that has resulted from this strategy. The properties in MEPT's portfolio average approximately 15 years in age.

Bentall Kennedy, MEPT's real estate advisor, is highly skilled in the entire spectrum of development and construction management from land acquisition through lease-up. These skills are leveraged through well-conceived and time-tested structures with developers, to reward superior performance. Bentall Kennedy has invested more than $5 billion through presale and Development Service Agreement arrangements with developers in a variety of very successful new construction, expansion and/or workout projects.

MEPT's management team has worked together since 1982 to consistently and successfully execute MEPT's investment strategy. Bentall Kennedy co-founded the Fund, and many of the founding principals are still active in the day-to-day operations of the fund. During the 34 years that MEPT has been in operation, Bentall Kennedy has built strong relationships with major real estate developers, leasing firms and property managers both nationally and in the markets where the Fund is active, which ensures that MEPT has access to first-rate investment opportunities through all phases of a real estate cycle.

The importance of these relationships and experience is evident in the Fund's performance. With over $6.4 billion in net assets, MEPT is one of the one of the largest commingled real estate equity funds in the country and the largest fund with a commitment to union labor.


How does the Fund utilize research?

Research plays a key role for MEPT and within Bentall Kennedy's organization and is fully integrated into the portfolio management process, including acquisition, disposition, and asset management functions. Bentall Kennedy's Research team, led by Doug Poutasse, former Executive Director of NCREIF, directs and coordinates research activities, developing national and regional economic and real estate market forecasts and helps to formulate the overall acquisition and portfolio management strategy.

All potential acquisitions for the Fund are thoroughly analyzed by Bentall Kennedy's acquisition and asset management teams, incorporating in-depth economic and property market analysis provided by the research team. Bentall Kennedy's proprietary real estate forecasting models provide an outlook for the potential asset's market and submarket performance. The research team's analysis is incorporated into the Investment Brief for every investment opportunity presented to Bentall Kennedy's Investment Committee and, if approved, to NewTower's Investment Committee, Trust Real Estate Investment Committee (TREIC) which has the authority to approve real estate acquisitions and dispositions of the Fund.

Once an asset is acquired, research provides the Portfolio Manager and the asset management team with updates and analysis of market and submarket data relative to the performance for each asset. Research contributes to the quarterly reports and annual business plans of each property, continually providing analysis of the market factors that influence investment performance. Research also works closely with Bentall Kennedy's portfolio and asset management teams to provide regular evaluations of and updates to the Fund's portfolio strategy.

Methods
In addition to evaluating the impact of short- and medium-term local market trends on investment performance, Bentall Kennedy's Research Team incorporates the potential impact of important macro economic and capital markets trends into the portfolio strategy and risk management process. Part of this top-down analysis includes evaluating the potential impact of far-reaching long-term trends such as changing demographics, the increasing importance of internet commerce, evolving trade patterns, and the growing impact that globalization is having on the domestic location choices of firms. Indeed, many of these trends have had specific influences on the Fund's apartment, retail, and industrial strategies, as well as the identification of and evolving targeting of our primary investment markets.

The analysis by the Research Team typically includes:

  • producing five-year proprietary forecasts of office, industrial, apartment and retail fundamentals (absorption, construction vacancy and rent growth) for primary U.S. markets,
  • constructing a forecast with base-line output from established econometric models, and updated with local market knowledge from Bentall Kennedy's acquisitions and asset management teams, and
  • maintaining a multi-factor model for targeting markets for each of the primary property types; office, industrial, retail and apartments that takes into account both expected performance and risk.

The research process can help mitigate portfolio risk by screening markets for both liquidity and structural imbalances. Markets with a more diverse demand for real estate and a longer history of institutional ownership can reduce execution risk and Bentall Kennedy's research process helps identify these markets by utilizing a process that weights each market's size as measured by population, employment, and duration and depth of institutional ownership. Structural imbalances are discovered by identifying both positive and negative deviations from historical averages in terms of capitalization rates and vacancy rates, as these have the greatest impact on performance.

Research Sources
Bentall Kennedy's Research Team incorporates both top-down and bottom-up approaches to monitoring markets and developing an outlook for the economy, capital markets and real estate markets. Bentall Kennedy's subscribes on a regular or periodic basis to a variety of on-line databases, journals, newspapers and other resources, including NCREIF, TortoWheaton, CoStar Data, Economy.com, REIS.com, Strategic Economic Decisions, Conerly Economic Consulting Services, and scores of brokerage and other reports in the real estate industry. An extensive library of these and other resources is maintained, used frequently and available to all staff. A file for each market and sub-market by property type is kept up-to-date, in hardcopy and digital forms.

Bentall Kennedy's Research team publishes periodic white papers for clients and audiences in the industry. Bentall Kennedy's research and other personnel are also active members of numerous organizations including NCREIF, NAIOP, NAREIM, ULI, PREA, National Association of Business Economists, Regional Science Association, and other local and regional economic development and real estate organizations. Bi-annually the research team publishes an economic and real estate markets outlook report.

Because of Bentall Kennedy's longstanding involvement in 30 markets nationwide, the Fund has access to local and often proprietary sources of market and related information. While MEPT refers to national sources of real estate data, the Fund's greatest and most reliable source of information stems from day-to-day involvement in each MEPT market. As a result, MEPT never relies solely on any single real estate source.


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