United States of America
Sep 19 2019Add to Favorites
MP Funds Management has provided investment funding for approximately $1.3b in unlisted real estate since 2013 and has provided an investment return of approximately 21% annually. Whilst MP Funds Management focuses on unlisted real estate, I am always fascinated by innovation and I personally will sometimes invest in other areas.
Recently I caught up with the founder of a very clever new Australian – based app called Stake which is a Business-to-Consumer based platform that enables Aussies to get direct exposure to the USA equities market.
Previously it’s been relatively difficult to get access to USA based equities other than via some of the major wealth groups or a managed fund. Stake is as easy as downloading the app, going through the simple onboarding process and voilà you can buy USA equities from your smart-phone.
In terms of fees, Stake makes its revenue from the FX as well as from interest earned on any uninvested capital, significantly more cost-efficient than a traditional brokerage account.
As I enter my date of birth during the Stake on-boarding process, a friendly fact pops up that tells me if I had have invested $5000 in Apple shares when I was 18, my holding would today be worth about $980,000 today.
So with my new Stake account, I am very excited to start looking at USA listed property companies, one of the first being SL Green Realty Corp.
SL Green Realty Corp is an S&P 500 company and New York City's largest office landlord. The company is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing the value of Manhattan commercial properties. As of June 30, 2019, SL Green held interests in 96 Manhattan buildings totaling 46.0 million square feet. This included ownership interests in 27.2 million square feet of Manhattan buildings and 18.8 million square feet securing debt and preferred equity investments.
In addition, SL Green holds ownership interests in 7 suburban properties comprised of 15 buildings totalling 2.3 million square feet in Brooklyn, Westchester County, and Connecticut.
The company has been listed on the NYSE for 21 years, has a market cap of $16.9b and stock is trading at about $81.00. Returns to shareholders spiked significantly in the 2014-15 period and have come back since then, however as a global interest rates come into negative territory owning a part of a robust company with solid and long-dated rental annuity income from A-grade buildings is a strategy that I like because I believe it will serve well through inevitable geopolitical and other volatility.
In keeping with the theme of A-grade assets, an overview of the jewels in the SL Green crown are:
1 Vanderbilt: A landmark world-class 1.7million sqft commercial tower is 57% pre-committed and under construction with delivery due next year.
One Maddison: a major repositioning of the existing character-building including a modern 17 story glass tower and sweeping views of Manhattan, the building is anticipated to be home to global top tier creative and tech firms.
185 Broadway:One of the first residential developments to be completed under the New York State’s Affordable New York programme and will offer a 31 story mixed use building with more than 200 units if housing, of which 30% will be designed as affordable, with two floors of flagship retail and three floors of commercial office space, due for completion in 2021.
760 Maddison:A joint venture with Giorgio Armani, including a flagship retail boutique and luxury residences designed by Mr. Armani himself.
460 West 34thStreet: Located in Hudson Yards, Manhattan West the existing building is being fully repositioned into a world-class commercial office building, with private bank and wealth manager First Republic Bank having already pre-committed as the anchor tenant to five floors of corporate office and ground-floor retail.
609 Fifth: After carrying out a reposition of the building which included the relocation of the lobby, entrance and the entire elevator core as well as the addition of substantial high-value retail space, the building is 100% leased with PUMA, We Work and Vince taking the entire of the building.
Mandi Prager is the principal of MP Funds Management. MP Funds Management has provided investment funding for over $1.1bn of real estate-based investments across 22 transactions and produced an average annualised investment return of 21-22% (IRR).
MP Funds Management has a key focus on real estate-based investment opportunities specifically along the eastern seaboard of Australia with strong underlying property fundamentals and target investment returns of between 15-40% on a risk-adjusted basis. MP Funds Management will originate its own investments as well as co-invest with other Managers on a deal-by-deal basis, where that investment is in line with the MP Funds Management investment philosophies which include:
>>Defendable assets with strong equity and downside risk protection
>>Outstanding underlying property fundamentals
>>Strong Manager fee alignment with investor equity protection and performance
>>Represent an outstanding risk-adjusted return
>>Risk mispriced in favour of the investor
Where MP Funds Management co-invests with another Manager, MP Funds Management Investors benefit from additional layers of diligence in both upfront initial due diligence, prior to making the investment as well as additional rigour in regular reporting diligence.
MP Funds Management is working on a range of high-quality deals for co-investment and institutional debt arrangement in the hotel sector, retail shopping centre sector, commercial office sector, development sector and acquisition of bulk residual brand new residential apartment product (at a discount). Our key focus is the eastern seaboard of Australia.
MP Funds Management fee structure is largely performance-based and aligned with investors receiving their principal investment and base return in the first instance, with our fees being largely performance-driven.
The information on this website is for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal or financial product. MP Report Australia, MP Funds Management, MP Group International, Golden Goose Capital (together MP Group or the Information Providers) do not purport to contain all the information that may be required to evaluate any potential transaction or investment. The Reader and its advisors should conduct their own independent review, investigations and analysis of any Opportunity mentioned and of the information contained, or referred to, in this document including the merits and risks involved. Information Providers have not had regard to the investment objectives, financial situation and particular needs of the Reader. The Reader should make its own investigation and assessment of the Investment, verify to its own satisfaction the accuracy, reliability and completeness of the information in this Information memorandum and obtain independent and specific advice from appropriate experts. The estimates and projections contained on this website involve significant elements of subjective judgment and analysis, which may or may not be correct. There are usually differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material. The Reader and its respective advisors should make their own independent review of the material assumptions, calculations and accounting policies upon which the accompanying estimates and projections are based. To the fullest extent permitted by law, the Information Providers disclaim and exclude all liability for any loss or damage suffered or incurred by any person as a result of: 1. Their reliance on the information contained in this information; 2. Any errors in or omissions from this information.
MP Funds Management update 1st Oct 2019 and investment pipeline: MP Funds Management has completed its co-investment into the acquisition of a 52,000sqm office asset in Brisbane CBD, right opposite the railway and with 98% of rental income underpinned by government tenants.
In November 2014 we co-invested with another Manager into the acquisition of a 13-level North Sydney CBD office tower for a purchase price of $36.75m or $4,665 per sqm. A total of $19.5m equity was invested with a gearing ratio of 65%, debt was locked in at a rate of c.4% for the intended five-year investment period.
MPFM has a key focus on real estate-based investment opportunities specifically along the eastern seaboard of Australia with strong underlying property fundamentals and target investment returns of between 15-40% on a risk-adjusted basis.
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