Location is the foremost consideration when we are selecting an investment property to recommend to our clients. Falcon seeks investments in prestigious and established locations that are enjoying strong economic fundamentals, and where there are some constraints on new real estate construction. We look for locations that will continue to be in demand by tenants and where occupancy rates are likely to stay relatively high.
Properties suggested for purchase will generally avoid construction risk. However, in some cases development activities or build-to-suit projects may meet the risk/return parameters of the investor. In every investment, the quality of construction is a major consideration and will be subjected to detailed verification by qualified engineers.
Making certain that properties are leased to credit-worthy tenants, and are likely to remain well leased, is particularly important in selecting a real estate investment. Leasing risk cannot be totally avoided, but it can be greatly reduced by selecting properties that are well-located in strong real estate markets. Such markets should have strong underlying economic fundamentals, declining vacancy rates, and constraints on new construction that will help limit competition.
For investors interested in developing a portfolio of properties, Falcon recommends diversification by property type and geography. A diversified portfolio typically includes office buildings, single- and multi-tenant shopping centers, warehouses and apartment complexes. These properties should also be located in different cities to protect against adverse trends in any one area of the United States.