This research report was written by Fundamental Research Corp., which has paid The Globe and Mail to distribute its research to our readers. The following text is excerpted from the report:
Rockspring Capital Texas Real Estate Trust will seek to invest in real estate and/or special situation real estate in the major metropolitan areas of Texas. Special situation real estate refers to transactions that do not trade according to market fundamentals due to special circumstances such as near foreclosure, overdue debt, owner needing a quick sale, short-term financing, etc. Special situation real estate is generally acquired below market value.
The trust is managed by Rockspring Capital LLC, which is based in Houston. Rockspring Capital has eight real estate investment funds currently under management, with a combined initial invested capital of $260-million (U.S.).
Through their prior investments, experience and relationships, management has developed considerable local real estate market knowledge.
Houston, San Antonio, Dallas, and Austin, or the “Texas triangle,” will be the focus of the investment – we maintain a positive outlook on real estate in these areas.
The fund is not limited to invest in any specific type of real estate investment. Their primary focus will be on raw land that can be developed, and debt secured on real estate assets.
Their primary focus will be on land that can be developed, development ready land and debt secured to real estate assets.
Management estimates that 70 per cent of the funds will be invested in raw land (non-cash flowing) with a three- to five-year time horizon. The remaining 30 per cent management anticipates will be in investments with a potential to generate cash flows in the near-term; these may include debt secured to real estate, and land acquired to be broken up into lots and sold.
Of the 59 properties management has acquired for previous funds, they have exited, or partially exited, 22 with a weighted average annual return of 35.2 per cent.
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