Respect for Capital
At Corten, we understand that the most important element of investing profitably is the protection and preservation of capital.
We believe that the depth and breadth of our vertically integrated operating platforms provide for superior downside protection.
Occupant Oriented Real Estate
Corten believes that occupant oriented real estate, where revenue is driven by human tenancy, is more resistant to technological disruption, dislocation and disintermediation.
Corten targets assets in the multifamily, office and hospitality sectors that provide opportunities to create experiential differentiation as the latest operational and design innovations become increasingly important in the marketplace. Corten has a long history of investment expertise in these three sectors, as well as the ability to utilize in-house property level management with Corten’s affiliated companies: BPG360, ResideBPG, and PM Hotel Group.
Corten targets a concentrated collection of MSA’s that have dynamic demand generators coupled with high barriers to entry.
Corten targets urban and major suburban markets in Washington, D.C., Philadelphia and New York City and Pittsburgh. Each of these four major MSA’s benefit from an established and diversified economy, proximity to major airports, established networks of regional and commuter railways, prestigious universities and some of the highest-rated hospitals. Barriers to new supply in the target markets are high due to scarcity of available land, restrictive entitlement processes, and high construction costs. Corten’s Managing Partners have established a significant presence in the region over the past three decades, having completed 102 transactions totaling $1.2 billion of invested equity throughout the Mid-Atlantic.
Transitional Asset Specialization
Corten focuses on the restoration and optimization of underperforming assets by executing significant physical, financial and operational improvements
Corten utilizes in-house capabilities to identify and execute property-level improvements for more stable outcomes, regardless of changes in the macro environment. Corten targets assets that need physical improvements ranging from minor aesthetic upgrades to full gut renovations to new additions to previously existing assets. Such improvements will seek to utilize Corten’s significant in-house construction management team and long-standing relationships with local subcontractors. Financial improvements will seek to optimize an asset’s capital structure and may include the de-leveraging of an existing capital stack, refinancing or extending project level debt, inserting preferred equity or mezzanine tranches, hedging interest rate risk and/or partially selling individual components of a portfolio to reduce remaining basis. Operational improvements of assets will include optimization of property-level revenues and expenses and will utilize Corten’s significant in-house property management teams and long-standing relationships with vendors and service providers in the region. The result of this culture of execution is an expected increase in the amount, the certainty, the durability and/or the duration of underlying property level cash flows, which subsequently equates to a corresponding increase in asset value.
Corten invests in subordinate portions of the capital structure, focusing on both common and preferred equity, as it seeks to balance risk and return in response to ever changing market dynamics
With the flexibility and expertise to invest across the subordinate portions of the capital stack, Corten benefits from an expanded opportunity set and an enhanced ability to create hedge-like characteristics and optionality in their investments/portfolio. Corten determines the optimal capital stack position through rigorous underwriting, detailed operational focus and a nuanced understanding of both upside potential and downside risks. The Managing Partners of Corten have participated in over 40 investments involving preferred equity and mezzanine debt (totaling approximately $400 million) during their careers, in addition to their extensive common equity investing experience.