Gadsden focuses on value-added retail and mixed-use properties in secondary and tertiary markets across the United States. The Company derives value from smaller, flexible investments that range from $5 million to $50 million. As a result of this chosen strategy, Gadsden has developed a unique competitive advantage that generally allows the Company to compete with less well capitalized buyers, such as publicly traded REITs and other large institutional investors.
In addition, Gadsden attracts specific sellers that prefer the tax deferral advantages offered through issuing operating partnership units in exchange for their properties. These real estate assets are typically operated by independent owners that are seeking to monetize their real estate holdings, and who are typically not well capitalized or well-seasoned real estate operators. These transactions create a variety of outcomes for Gadsden and the sellers, which typically result in lease-up and value-added opportunities that may not be otherwise achieved without one another.
Through this real estate strategy, Gadsden strives to achieve:
- Higher initial acquisition returns than other REITs;
- Higher rents and lower operating expenses than the prior owners; and
- Higher internal growth than many of its REIT peers
Gadsden will initially invest in underperforming shopping centers in non-gateway markets and may invest in other real estate sectors over time. The Company believes that this diversification will mitigate risk and sector volatility, while creating value across its income-producing real estate portfolio. This business strategy will be executed with a focus on risk mitigation through judicious acquisition underwriting standards and prudent use of leverage.