October 6, 2023
 min read

The Elevate Money Property Acquisition Strategy

Read about our investment strategy

Elevate Money made a decision to invest in Single Tenant Net Lease, or “STNL”, commercial real estate properties for a number of important reasons. STNL is defined as an entire property being leased to just one tenant. Examples would include Taco Bell, Family Dollar, or a Shell Gas Station.

First of all, STNL as an asset class has many investments grade and private corporations with corporate credit as tenants to choose from in a wide range of prices from less than $1.0M to over $500M.

This large asset class allows Elevate Money to model a strategy that is best for our investors and match the amount of income we raise from investors to purchase commercial properties. With strong corporate credit backing the lease, we expect to receive predictable and stable rental income and our goal is to always pay our stated dividend. Because we are acquiring well capitalized entities as tenants, our investors are able to invest in well-known or household names such as a Family Dollar Store and a Shell branded gas station.

Another benefit to owning STNL is a long-term lease, and ease of management based on the lease structure where the tenant pays for taxes, insurance, and maintains the property. Our company has decades of experience in this asset class, which provides another level of comfort for our investors.

To summarize, the STNL asset class aims to provide predictable & stable cash flow, capital appreciation, strong corporate credit, long term leases, and ease of management.

We explored other asset classes like Single family residential, or “SFR”, but ultimately chose the STNL space. Some of the concerns we had with SFR or residential property ownership was the lack of corporate credit, landlord required maintenance & property management, short term leases, ease and frequency of tenants relocating, unpredictable cash flow if a tenant was late or did not pay rent, and the lack of consistency in the property type across the country.

By investing in STNL, we can buy a Family Dollar in California, Texas, and Florida and the stores will be built in a similar manner (unless there is a corporate design change), the credit will be the same, and the rent will be paid from the same corporate headquarters. This investment process can also be scaled with many other corporate tenants, such as Dollar General, McDonald’s, Chick Fil-A, Starbucks, Dunkin Donuts, and IHOP.

David Perduk serves as the Chief Investment officer, or CIO, of Elevate Money, and oversees the construction of Elevate Money’s real estate portfolio.  David has over 20 years of experience in acquisition and disposition of investment real estate and related services, which include financing, asset management and quantitative and qualitative analyses. He formerly worked with Elevate Money’s CEO Harold Hofer at his previous company where they purchased over $400 million dollars of properties together.  Listen to David’s full-length interview here.

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