MEPT's investment strategy is to acquire top-quality, income-producing assets through development, rehabilitation, or purchase and repositioning of undervalued assets. Key tenets of the strategy include:
As a core fund, emphasis on a stable income stream is the primary driver of
the overall portfolio strategy. MEPT's large operating portfolio generates significant
and consistent cash flow. The Fund's active asset management approach focuses
on:
- maintaining a stable, and relatively high, occupancy rate;
- maximizing property-level efficiency and expense savings; and
- mitigating risk related to lease rollover and tenant delinquencies.
MEPT maintains a portfolio diversified by property type, location, tenant type
and size of asset.
- Focused on the five core property types, the investment strategy targets
major markets with attractive long-term demand/supply characteristics and
high barriers to entry.
- Strategy execution changes based upon market conditions, real estate cycle,
and investment opportunities.
MEPT has grown its portfolio by acquiring existing core assets at or below replacement
cost, or through new construction, redevelopment, rehabilitation or adaptive
re-use. At the same time, MEPT maintains an active disposition program and markets
assets for sale when the downside risk outweighs the long-term potential of
the asset.
- Acquiring existing assets at or below replacement cost allows MEPT to compete
effectively on price (lease rates) for a deep and varied pool of credit tenants.
- Maintaining a pipeline of high-quality new construction projects is driven
by market demand for new space but is rooted in the premise that newly constructed,
modern space traditionally earns higher rents and steadier demand from credit
tenants. Development and other value-add investments are generally limited
to 20% of the Fund portfolio.
- MEPT identifies assets to sell based on criteria directly related to the
asset's potential to contribute future performance for MEPT.
As an open-end fund, and consistent with the MEPT's 28-year track record, liquidity
is a key component of the portfolio strategy, and the Fund's track record on
liquidity is superior in the U.S. core open-end fund universe. MEPT's cash management
policy has two fundamental objectives:
- Meet the Fund's commitments in managing a multi-billion dollar real estate
portfolio, including acquisitions, property operations and expenses, and debt
service; and
- Maintain sufficient cash to honor investor withdrawal requests.
- MEPT typically makes 100% equity investments (unleveraged), and MEPT's use
of debt is considered to be moderate within core real estate.
- The Fund targets long-term, third-party leverage to 20% of gross asset value.
The Fund's leverage policy is structured to mitigate risks related to interest
rate volatility, maturity exposure, loan covenant restrictions and refinancing.
RPI provides the framework for MEPT to incorporate environmentally and socially
responsible governance practices into prudently managing real estate investments.
- The Fund only develops buildings that are designed to be U.S. Green Building
Council's Leadership in Energy and Environmental Design (LEED) Silver-certified
or higher, and emphasizes energy-efficient, high-performance property operations
in its existing portfolio.
- MEPT maintains an unwavering commitment to fair labor practices by using
100% union labor and signatory contractors to ensure that prevailing wages
and benefits are paid to foster economic health and growth in the communities
where the Fund invests.
- The Fund upholds the highest degree of fiduciary standards and unparalleled
transparency and communication with its investors.
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