our firm
Pendo Investments (“Pendo”) is a private real estate investment company that seeks to provide superior risk adjusted returns in value-add and core plus commercial real estate investments throughout the West and Southwest United States.
Pendo is a Latin term for “value,” as we are a value investor focused on identifying under-performing properties with current cash flow. We target assets that can be purchased below replacement cost and repositioned to create significant value through increasing cash flow to “as-improved” market levels. Building on a successful $5 billion track record, both in acquisition and “hands-on” management, we created Pendo to be a best-in-class real estate manager that would continue the success we achieved with our previous brands, including Legg Mason, Latitude, Prudential, Morgan Stanley and LNR. Pendo’s principals are thoroughly experienced fiduciaries, having managed institutional capital across nine prior, value-add oriented funds over the past 25+ years. Pendo’s management team has closed a variety of transactions with both institutional and private investors. Since 2003, Pendo’s management team has led over $1.25 billion in apartment investments across 90+ properties throughout the United States. Over the past 15 years, our team has successfully executed value-add strategies on over 7,000 apartment units.
The Pendo team has (1) a depth of knowledge across all property types, (2) an ability to source attractive deals, both on and off market, (3) executed value-add strategies on a timely basis for 25+ years, in many geographic regions and throughout all market cycles, (4) sourced and structured both debt and equity and, (5) successfully managed and leased over 5,000 properties throughout the US to enhance value for investors. We believe we are uniquely positioned to capitalize on the opportunities in the current real estate market.
INVESTMENT RETURN PROFILE
Our investments offer significant and stable current cash flow returns of 5-10%+ (paid quarterly), with upside from below market rents, resulting in overall target net returns of 10-15%.
- Target Returns - 10-15% annually
- Target Investor Dividends - 5-10%+ annually
- Target Hold Period - 2-10 years
- Pendo Co-Invest – All Deals
The principals and family members of Pendo invest meaningfully in every transaction, thereby creating an absolute alignment of interest with each investor.
WHY PRIVATE REAL ESTATE IN YOUR PORTFOLIO?
Pendo believes, among the five primary investment asset classes (stocks, bonds, cash, commodities and real estate), private real estate (apartments, in particular) offers the most attractive combination of:
Current cash flow/ yield
Stable and attractive returns
Inflation hedge
(potential to increase rent to keep pace with inflation)
Portfolio diversification
Lack of correlation to stocks and bonds
Access to private, mid-market transactions not publicly available
(through REITs, etc)
TRANSPARENCY / INVESTOR REPORTING
Pendo provides complete transparency to its investors with regular and detailed correspondence and investment updates. For example, Pendo distributes dividends quarterly with an informative letter outlining our current progress and achieved results compared to original forecast. Additionally, each deal is held via a separate, standalone LLC, with a third party property manager and accountant, which assists with transparency and insulates investors from certain risks associated with co-mingling assets. We understand and take seriously the faith and trust investors place in us and work diligently and purposefully on each deal to meet or exceed investment expectations.
INVESTMENT STRATEGY
Pendo targets core-plus and value-add, class A and B properties located throughout the West and Southwest United States in submarkets with barriers to new supply. Investment selection is centered around cash flowing properties that provide strong current returns and significant upside potential as value-add capital improvements are completed and rental rates increased to market levels. Pendo underwriting is not dependent on market growth for upside potential, however, we target assets that are well positioned to benefit from favorable demographic and employment fundamentals.
TARGET ASSET CHARACTERISTICS
- Asset Class: A- to B-
- Asset Size: $2 - 50 million
- Transaction Type: Core-plus to value-add
- Well located, cash flowing assets, providing attractive current returns with upside potential
- Assets suffering from undercapitalized and distressed ownership, mismanagement and lack of operational expertise
- Value increase through capital improvements, re-tenanting, leasing and management expertise
- Worst house on better block
- Purchase below replacement cost
TARGET MARKET CHARACTERISTICS
- Positive population, demographic and employment trends
- Multiple employment generators - no “one-horse towns”
- Barriers to future supply - infill locations, limited developable land, below replacement cost
- Close proximity to major ports, distribution and transportation centers
- Presence of research facilities, universities and government centers
- Strong school districts and convenient access to amenities (grocery stores, recreation areas, public transportation, etc.)
Our Track Record
Pendo’s principals have a long and successful track record, managing over $5 billion of institutional capital across nine prior, value-add oriented funds. Previous funds were managed under various banners, including Legg Mason, Latitude, Prudential, ING and Morgan Stanley.