INVESTMENT: OUR APPROACH
How we do what we do.
The following philosophy sets Boutique Apartments apart:
Focus on Exit Strategies
Boutique Apartments focuses on assets with multiple exit strategies including private, one-off sales, portfolio sales, condo disposition, or mergers with existing private or public entities. We also prefer property investments that appeal to a wide group of subsequent buyers.
Anticipation of Trends
We seek to anticipate investment trends before they become generally appreciated. Boutique Apartments Principals were among the first to purchase and reposition class B-C multi-family properties in central Denver in the 1990s.
Deal Flow and Relationship Network
Boutique Apartments has exceptional access to deal flow through a strong network of relationships with real estate professionals, financial institutions, capital advisors, operating partners, property owners and senior business executives. We also draw on the experience of our Advisory Board members, who are well-connected executives from the real estate, financial and business community. This network allows our firm to access key information and resources at all points of the development process.
Equity-based Investment Strategy
Our equity-based investment strategy seeks to achieve significant equity ownership in our real estate assets. Our conservative debt strategy significantly reduces risk, minimizes investment volatility and provides considerable financial flexibility. This strategy also ensures that growth is not artificially fueled by leverage and allows our firm to effectively manage risk in all market conditions.
Efficient Use of Debt
When practical, Boutique Apartments retires debt through the use of short-term, fully amortizing mortgages. By securing a 5- to 7-year fully amortizing mortgage on a property, more than 71 percent of the mortgage loan payment is allocated to principal buildup, thereby significantly reducing interest expenses. This strategy enables us to build substantial equity every year — instead of paying interest to lenders.
Cost Segregation
Boutique Apartments often employs a cost segregation tax strategy to accelerate property depreciation. In certain instances, the Internal Revenue Service allows real estate owners to reclassify building materials contained in a property from a 27.5-year depreciable life to a 5-, 7- or 15-year depreciable life. Boutique Apartments uses this tax-deferred income to retire mortgage debt on properties, to build investor equity and substantially increase investors’ post-tax investment return.
Boutique Apartments Category
We introduced a new multi-family category, called "Boutique Apartments," in the spring of 2003. The concept was and is so successful, it’s become the name of our holding company. The Boutique Apartment concept is based on acquiring Class B or Class C apartment buildings and repositioning them using unique and creative arts-oriented themes. The living areas feature upscale design amenities such as concrete countertops, steel backslashes and bright paint colors, while common areas are decorated with original artwork and industrial finishes. Boutique Apartments primarily attract young professionals who desire to live in contemporary, centrally-located urban buildings but who cannot afford rents in newer Class A apartment properties. This unique category enables us to differentiate our company and compete outside the typical homogenous apartment market.
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