INVESTMENT PROCESS
In evaluating and pursuing investments on behalf of clients, FHR generally follows the procedures below:
01
PRE-SCREENING
FHR’s acquisition team screens opportunities that are submitted through
the extensive relationship network and narrows selection by targeting
those investments that fit a client’s investment profile.
02
FINANCIAL ANALYSIS
Potential transactions are identified and analyzed balancing relative risk and return. Detailed financial projections are prepared and initial market due diligence is performed.
03
INTERNAL CONSENSUS
Prior to any offer being made, the acquisition officer prepares an Initial
Approval Memo describing the deal structure which is reviewed by senior
management. If consensus is reached internally, FHR issues a non-binding
verbal offer or submits a non-binding letter of intent to the prospective seller.
04
CONTRACT EXECUTION
Acceptance by seller of the non-binding letter of intent initiates
negotiation of a purchase and sale agreement that typically
leads into a 30-day due diligence period.
05
DUE DILIGENCE
This phase draws upon the expertise and services of the team. Property operations, mechanical systems, structural quality, as well as market characteristics including competitive rents, operating expenses, occupancy rates, absorption trends and tenant concessions, among other property and market specific issues are analyzed. Engineering and environmental reports on a property are prepared by nationally recognized third party providers. Each property lease is reviewed, the property taxes analyzed, and compliance with local, state and national regulations confirmed. The property is visited by
multiple FHR professionals and tenants are interviewed.
06
FINAL APPROVAL
A draft information package detailing the investment opportunity
(the Final Approval Memo) is distributed to senior management for review. A
review meeting serves as an opportunity internally to finalize negotiation points
and address any final issues relating to an acquisition.
07
FINAL REVIEW
The Investment Committee formally reviews the Final Approval Memo.
If it confirms all issues have been adequately addressed, the Investment
Committee will vote on the acquisition. FHR will make an investment only
with the unanimous approval of the Investment Committee.