Elevate Lens +
Real Estate Investing Strategy
Elevate Lens+ is our proprietary financial model used to evaluate all potential real estate investments for our STNL+ commercial properties REIT. To be eligible for purchase by this REIT, properties must meet our rigorous standards and qualifications.
The Model
The Elevate Lens+ rating is based on an in-depth analysis of the four main pillars in commercial property investing: Lease, Tenant, Location, and 360 View. Each pillar is given a rating between 0 and 5 stars. Properties with an EL+ cumulative rating of 4 stars or higher meet our target criteria
Lease
Our criteria are leases with 5 or more remaining years and with rental increases of 1% or more per year. We favor long-term, durable rental cash flows coupled with rental increases that we believe will keep pace with inflation.
Tenant
"Investment Grade” tenant financial strength as rated by Standard & Poor’s is desired. If the tenant’s credit is not rated, we scrutinize tenant financial statements and the profitability of the property’s business operations.
Location
Location is assessed by evaluating comparative rental rates with other properties in the area and analyzing local demographic trends. Properties with limited and quantifiable deferred maintenance are preferred.
360 View
Our professional opinion and insights where we consider both quantitative and qualitative factors in determining our investment decision.
The Market
Real estate surrounds us every day – apartments where we live, office buildings where we work, shopping centers where shop and dine, industrial and distribution properties where goods are made and shipped, and so on.
This equates to $16 trillion of real estate in the United States, excluding personal residences. Real estate is very close to the aggregate market capitalization of all New York Stock Exchange-listed companies (around $20 trillion at year-end 2020), as a comparison.
Despite the close comparisons in market size, many investors don’t have much if any of their portfolio allocated to real estate, because access has been limited by the large sums of capital required to own real estate. Elevate Money is removing this barrier and granting access to most investors starting with as little as $100.
$16 Trillion
The total size of commercial real estate in the U.S. was estimated $16 trillion in 2018.
High Returns
The market size of commercial real estate, as measured by revenue, was $992B in 2020.
Growing Market
The total value of commercial real estate construction activity in 2020 was about $80B.
Thesis
Real estate ownership provides two primary elements of potential investment return: Income and capital appreciation.
The income component of investment return is more immediate and more tangible. Elevate Money’s STNL+ REIT seeks to achieve investment objectives by purchasing properties with predictable and consistent monthly income. In this regard, our STNL+ REIT intends to buy properties that are each individually leased to one tenant for multiple years. These long-term leased, one-tenant properties may generate consistent rental payments.
Income
Income is generated from monthly tenant rental receipts.
Capital appreciation
Capital appreciation, or the increase in a property’s value over time, is realized when REIT shareholders sell their shares via Share Redemption.
Portfolio Diversification
As 2020 taught us, you never know what's going to happen -- with the economy or in the world. So having your investments spread across different assets is one of the wisest moves you can make in the long run.
For example, our Future of Housing Fund’s development of modular home communities may result in capital appreciation as determined by independent property appraisals. If so, such capital appreciation would be reflected in an increased value of FOHF shares.