April 5, 2022
 min read

Introducing Elevate Lens+

The Elevate Lens+ Rating System, our analysis for property acquisition candidates

The Elevate Lens+ Rating System (“EL+”), which is the means for Elevate Money's analysis of property acquisition candidates, considers four specific investment criteria.  These criteria are specific to Elevate Money’s “Single Tenant, Net Lease”, or STNL, targeted property type. They are (1) the lease length in years, (2) the tenant’s financial strength, (3) the property’s location, and (4) Elevate Money’s own “360 View” on property and tenant intangibles.

The Lease

Elevate Money’s primary goal is to deliver dividends to its customers, which come from the property’s tenant consistently paying monthly rent. So, Elevate Money is interested in properties that have rent-paying tenants in place with at least 5 more years remaining under their leases. Furthermore, the properties are preferably leased to companies that meet the “investment grade” caliber mentioned below, as stronger tenant financials lower the risk of the tenant not paying rent. With a longer lease term and a strong tenant, we can expect to receive rent monthly for many years, achieving the goal of being able to pay dividends for many years.

The Tenant

A tenant's financial strength is often measured by rating agencies such as Standard & Poor’s and Moody’s. These rating agencies do a deep dive into company financial statements and provide a risk assessment of the company’s ability to meet all of its financial obligations, including rent payment. The rating systems range from “investment grade” to “junk”. Elevate Money prefers properties leased to companies that meet the “investment grade” standard, where the risk of the tenant not paying rent is statistically very low¹.

If a tenant does not have financial rank from a rating agency, our Elevate Money team performs an in-depth analysis of the tenant’s financial situation. The types of questions we seek to answer include: What is the tenant’s net worth? How profitable is the subject location? How long has the tenant been in business, overall and at the subject location?

The Location

Location is analyzed in many different ways including local population and demographics trends, business development in the area, and the comparison of the tenant’s rent relative to the local rental market. Also, the degree to which the subject property is “mission critical” to the tenant’s business is also considered.

360 View

Finally, the 360 View polls the “buy or don’t buy” opinions of our own real estate team. This is invaluable because of the decades of experience, nuanced understanding and broad considerations that our in-house team brings to the table.

The Rating

Each EL+ category is scrupulously analyzed and given a rating of up to 5 Stars. The resultant EL+ rating helps to measure how each property ranks with other acquisition candidates and with properties already purchased by Elevate Money. We average each EL+ category’s 5 Star rating to come up with a composite score. We strive to purchase properties with at least a 4 Star average composite rating. To learn more, you can visit our Properties Page to see every property’s EL+ ranking.

  1. Standard and Poor’s Financial Services, LLC. 2019. Guide to Credit Rating Essentials

Harold Hofer is a Co-Founder and CEO of Elevate Money.

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