Boston-based Albany Road was established in July 2012 to deliver attractive risk-adjusted and tax efficient returns to our high net worth and family office investors. Following an initial focus on opportunities in the Northeast, the firm expanded its reach into the Southeast and Southwest with the opening of offices in both Nashville and Dallas, and subsequent acquisitions in Tennessee, Georgia, North Carolina, South Carolina, and Texas.
Albany Road’s four founding Partners bring more than 120 years of real estate, investment banking, and venture capital experience to our platform. The diverse, yet complementary, skill sets of the principals provide us with a unique perspective and discipline that is utilized to evaluate a wide range of investment opportunities.
Since our inception, the Partners (and employees) have invested a minimum of 10% of the equity required in any given investment or fund, culminating in our $50MM to date.
Albany Road generally pursues investment opportunities priced in the $20,000,000-$50,000,000 range. This is inefficient and fertile space in which to operate, as the deal size is typically too small for major institutions to focus on, and too large for the typical private operator to tackle. We feel that the favorable risk-return metrics found in this pricing range are notable.
Investments are capitalized with a blend of our own equity coupled with high net worth and family office equity. A 65%-75% debt component is employed to take advantage of the still favorable interest rate environment that exists today, and this approach allows us to generate the majority of our returns (+/- 75%) via immediate cash-on-cash yields, as opposed to back-loaded residual pricing.
Albany Road is focused on acquiring properties at a favorable basis, and at a discount to replacement cost, thus reducing the likelihood the property will have to compete (from a rental rate perspective) with any new development projects, when and if they were to be delivered.
We pursue a variety of product types to accomplish our goals, including but not limited to (1) urban, suburban, and medical oﬃce, (2) warehouse, distribution, and flex industrial, and (3) self-storage. While we prefer real estate with a consistent cash ﬂow component, ideally coupled with a repositioning story, we will consider acquiring truer value-add product (vacancy, lease-up risk, etc.) if the opportunity is balanced with appropriate projected returns and quantifiable risks.
Asset Management Services
Albany Road’s Asset Management platform develops and executes individualized strategies to create and enhance the value of each asset through revenue generation, improving net operating income, and managing capital improvement projects. With a current portfolio size approaching eight million square feet, the Asset Services group strives to increase equity value for Albany Road’s investors by improving each asset’s position within its sub-market, while effectively servicing a diverse tenant base across the Northeast, Southeast and Southwest United States.
In order to maximize value, the Albany Road Asset Services group implements each asset’s investment thesis through daily discussion and collaboration with brokerage and property management teams to implement custom leasing, marketing, and operating strategies. This includes strategic marketing strategies for key vacancies, ensuring frequent communication with existing tenants to build strong relationships and enhance retention, regional vendor service bidding and procurement, managing national roofing contracts, and implementing competitively bid capital and tenant improvement projects.
Fund I (Albany Road Storage Fund LLC)
Fund I was closed in February of 2015 with $24,995,000 of equity commitments, creating roughly $75,000,000 of buying power (assuming 65% leverage). The Fund was fully divested in May 2016.
Fund I was raised in order to acquire one-off, self-storage investments in the Northeast United States, which typically trade at pricing less than $5,000,000. Due to these to these small deal sizes and the inefficiencies associated with aggregating a large self-storage portfolio, self-storage is a product that commands a premium when traded in bulk. Albany Road formed Fund I to take advantage of this unique opportunity.
In early 2016, having experienced NOI increases across the portfolio and with acquisition opportunities becoming increasingly scarce due to increased competition and higher pricing, Albany Road chose to sell the portfolio to take advantage of the market conditions and high demand for storage product.
As a result of executing on this strategy, Fund I delivered a 36.5% net IRR for its investors.
Fund II (Albany Road Real Estate Fund II LLC)
Albany Road successfully completed our final close on Albany Road Real Estate Fund II (the “Fund”) in April 2018 at approximately $175MM.
As of May 2019, the fund is approximately 45% deployed in 10 investments across the Northeast, Southeast, and Southwest United States. The investments include a well-diversified mix of product types, including urban, suburban, and medical office, as well as industrial and business park (industrial/office) assets.
To date, we have offered our Fund investors two co-investment opportunities totaling $21MM.