|BREP employs a value driven high-yield, low-risk methodology to its investing. It targets properties in lower-middle income areas in Philadelphia, which are traditionally viewed as high-risk areas for investment.BREP mitigates risk with a refined and systematic methodology:
―The company buys distressed properties at a deep discount to market and replacement cost, resulting in a large equity buffer.
―The company has longstanding relationships with a select group of local contractors that it utilizes to renovate properties to high standards while simultaneously controlling costs.
―The company’s managers have built a vast network of sources for distressed properties including banks, REO agents and estate attorneys.
―The company employs a finely-honed construction methodology that delivers a product near the top of its markets while keeping costs reasonable. This allows BREP to obtain excellent tenants, thereby decreasing repair and vacancy costs.
―The company diversifies its portfolio by making a large number of small investments in multiple neighborhoods.
―The company combines cash flow, equity and neighborhood quality characteristics of potential purchases into a systematic, quantitative purchase criteria.