Investment Perspectives

First Impressions

Institutional and family office investors instinctively wish to fit their managers into boxes. It’s natural. Yet, since inception, South Street has resisted conventional labels, seeking a more elastic profile. Personally, and stylistically the team welcomes a wide range of descriptions — entrepreneurial, nimble, creative, diligent, perhaps a bit contrarian. But these alone have not produced the loyal and confident following the firm enjoys. And so, add honesty, transparency, integrity and relentlessness to the mix.

An Operational Orientation​

South Street’s principals have always approached real estate investment from an operator’s perspective.

“We don’t like the word ‘vertically integrated’ but from a capital and operational standpoint it is a rare and unquestionable advantage to the investor. We have important institutional experience and perspective that is coupled with a boots-on-the-ground understanding of our assets.. Very unique in our space.”

The firm’s investment and development experience, especially in the luxury marketplace, provides the opportunity to impact and improve every aspect of a project from concept, through to execution and operations. This, combined with life-cycle perspective, presents opportunities to creatively add value to complex assets and special situations. All parties benefit – institutional clients, family office investors, project owners and end users.

Opportunistic returns are inherently associated with both complexity and risk. The firm embraces both. A rigorous, quantitative approach to due diligence and underwriting, to creative strategies that reduce risk along with a clear vision for how the investment will actualize – short or long term – characterize the analytical approach the firm brings to each opportunity. This goes beyond seeing value where others do not, it goes to bringing capital, human talent, experience, and ‘what if’ envisioning to a project.

“This is an approach we’ve gotten very good at and have been doing since day one – getting involved in complex, special situations, many of which  we have de-risked by the time we have reached the closing table. Whether that’s negotiating the loans, buying notes from a multitude of banks, resolving or recapitalizing troubled partnerships, finding commercial tenants, even having litigation dismissed at closing, diligence and perseverance have unlocked value others either overlook or are unwilling to work through.”

Kiawah Partners

On Kiawah Island, South Street integrates residential construction and sales, hotel, retail and commercial centers and extensive club golf and amenity membership programs.

Market Cycle Risk Management

The real estate marketplace in 2009, when the firm was founded, was an era ripe for buying distressed assets, resulting in exceptional basis valuations. As the market evolved toward 2020 the firm was nevertheless able to find opportunistic and value add investments throughout the cycle. Today, the pandemic has brought about a sea change in the residential, commercial and hospitality sectors. Throughout these cycles, South Street demonstrated an ability to capitalize on fluid market dynamics and deliver exceptional risk-adjusted returns.

Instrumental in this is access to long term capital. ​

“We have deals where the horizon is 2-3-4 years, such as an office building where you are buying distressed, stabilizing rents, bringing in new tenants and remarketing the asset. Projects like Kiawah Island and the Cliffs had different starting points, but are both long term holds where our operating and development prowess stabilizes the investment, with gains over the longer term. Patient capital essentially allows us to hold these in perpetuity. The ability to do both is something that is important to us and our investors.”

Creative Capital: Rescue, Recapitalization & Greenfield Models

Imagination and creativity are themselves undervalued assets that can unlock value. Examples are where the firm has partnered with existing owners of great real estate assets to solve liquidity or capital stack issues. This is not a distressed asset situation, but one where the firm can enter, provide capital expertise and liquidity, along with operational help to stabilize the project. Importantly, the owner stays in place. South Street is investing, but also creating a broad foundation to support the enterprise.

A second opportunity arises when landowners wish to see a development through to the end by partnering with South Street. In these greenfield situations the owner contributes land to a joint venture and South Street delivers a turnkey development – from capital through to construction and management. In these areas South Street’s capabilities in the high net worth marketplace are as unique as they are comprehensive – from land planning to infrastructure to buildout. Salamander Residences is an excellent example where the owner and customer benefit from the additional lift provided by the overall resort experience.

Salamander

At Salamander, South Street is delivering a residential community of 49 homes that will enjoy lavish amenities of the resort. Half were spoken for before groundbreaking.

Presented plans, materials and specifications are subject to architectural and other revisions at the sole discretion of the developer, builder or architect, or as may be requested by law. Floor plans may not be to scale. Any furniture, appliances or decorator ready items depicted herein are shown for artistic and illustrative purposes only and are not included in the purchase and sale of the residence. There are various methods for calculating the total square footage of a residence and the quoted square footage of a unit may vary. All conditions and descriptions of amenities and facilities are subject to the Developer’s continuing quality improvement programs.

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