What is the organizational structure of ATEL Properties?
ATEL Properties is a California Corporation, and a wholly-owned subsidiary of privately-held ATEL Capital Group, Inc. The group includes an acquisitions director, real estate attorney, financial analyst and principal oversight by the CEO and CFO of ATEL Capital Group.
What is ATEL's source of funds?
Currently we are looking to diversify a portion of cash accrued on ATEL's balance sheet. Moving forward, we intend to create a real estate fund through ATEL Securities Corp., the broker-dealer arm of ATEL Capital.
What purchase price range will ATEL consider?
We will look at buildings priced between $3-10 million, gross asking price. What are ATEL's financing criteria? We prefer to provide our own financing between 70-80% of the purchase price. A line of credit and strong relationships with several top lending institutions provide ATEL with a significant advantage in this area. Financing arrangements such as conduit loans which require the buyer to assume an existing loan typically prevent us from leveraging at our targeted percentage.
What are ATEL's most important investment benchmarks?
Generally speaking, we look for no less than a 8% cap on actual in place rents, however in situations where we believe large vacancies present significant upside, we will adjust our cap rate accordingly. Secondly, we require stabilized cash on cash returns of at least 10% after the first 12 months of ownership.
What are ATEL's broader investment criteria?
We are currently targeting multifamily and student housing properties located within walking distance from a major university and CBD of a state capital. We also will look at stabilized, well-maintained, multi-tenant, Class B/C office and retail properties. Although we will take advantage of certain value-add opportunities, we do not acquire properties with large vacancies or that require a substantial investment of capital. Buildings with significant deferred maintenance or of dated construction typically present a challenge.
What is ATEL's optimum hold period?
Between 5-7 years, depending on the amount of time required to stabilize the asset. Are there specific types of commercial property that ATEL will not consider? Generally, we do not consider vacant land, large rehab or development projects.
Describe ATEL's current real estate portfolio.
Currently we own apartment buildings in Florida, manufacturing facilities in Illinois, and office & retail properties in Colorado.