Pilot Investments looks for “value-add” properties where it can purchase the underlying real estate for a discount to replacement cost. Pricing for acquisitions pursued range from $3 million to $50 million, and by property type as follows:
- Apartments: 50-300 units
- Office: 50,000-200,000 square feet
- Industrial: 50,000-250,000 square feet
- Retail: 10,000-150,000 square feet
The company favors “A” and “B” Class properties in markets where tenant supply is high and where occupancy and rent levels tend to be more stable and predictable over the long term. Searching for properties in locations where critical mass of like-kind assets have already been established, and where ample tenant amenities are easily accessible, have proven to be key components to finding high quality real estate investments that withstand the test of time.
Depending on a property's characteristics, Pilot Investments adds value through some or all of the following methods:
- Not overpaying for properties; willingness to walk away
- Property upgrades and redevelopment
- Change of use through zoning modifications to increase property value
- Remediation of environmental contamination (Brownfields sites)
- Use of leveraged financing
- Reducing operating expenses
- Ability to keep rent increases below market rates
- Improvements to day-to-day property management
- Enhancements to curb appeal
- Timing of the ultimate resale of the property
Pilot's main areas of focus are within or in close proximity to the City of Boston, and alternatively, within and along the Route 128 / I-95 inner suburbs. Easy access to major highways, public transportation and areas of employment are of primary interest. Pilot acquires properties principally in densely populated areas to ensure, upon the completion of redevelopment and occupancy stabilization, that its properties are appealing to a large number of future buyers. When Pilot closes on a new acquisition, it wants to be already focusing on and protecting its future exit options as well.
Reporting and Record Keeping
Pilot is accustomed to providing its institutional and individual investors and their representatives with property reports and financial records on a timely and “as needed” basis. Transparency between Pilot and their investors is of utmost importance, and it's the way that Pilot conducts its business.
Pilot Investments is an opportunistic real estate investment company that first and foremost, seeks to maximize returns for its investors. Planned holding periods for acquired properties are typically 2-5 years, with flexibility maintained to sell sooner or later depending on favorable market conditions.