Long-Term Leadership: Let’s Talk About Investor Communications…
At CF Capital, we are committed to being transparent with our partners. Over the past months, we have increased our efforts to make sure that our audience gets to know us not only as investors, but as people. Just as a review, here are some of the topics we have covered in our blog:
We plan to continue educating our investors for the foreseeable future and fully intend to be as communicative as possible.
Although cliché, we think the following quote by the Dalai Lama is the belief we carry when it comes to transparency:
“A lack of transparency results in distrust and a deep sense of insecurity.”
We believe the foundation of a good relationship is communication, so that there is mutual trust and security for a flourishing partnership. The line of communication creates an opening for investors to let us know their expectations and for us to let them know our expectations.
As stated above, we will continue to educate, but we also want to let our investors know that we are being good stewards of their capital.
What does that mean? We believe that good stewards are ethical, operate with integrity, and treat other’s interests and capital ahead of their own. Good stewards also protect their investor’s capital and refuse to go to sleep at night without a sense that they are doing everything they can to do best by their investment partners. Part of this is placing hyper focus on efforts that ensure the investment is as successful as possible.
Nevertheless, we will not take your vote of confidence in us for granted!
Our communications are initiated with the idea that investors are entitled to be fully educated on the status of their investment capital and the assets they are invested in. This means providing detailed ongoing color on how we are handling challenges and/or opportunities. We believe this is extremely important.
The “Golden Rule” provides a poignant guiding light for us in how we approach investor communications and relations in general: Do to others what you want them to do to you.
CF Capital provides comprehensive monthly updates to all investors. We also provide more in-depth communications on a quarterly basis, including financial performance, updates on capital expenditures, submarket pertinent data, and general asset management key performance indicators. Additionally, we like to host an annual meeting with our investors to give updates on current status, what we're dealing with, and what our intentions are moving forward to accelerate the partnership’s interests and march forward to further asset optimization.
Any thoughts on the macro and micro economic environment and the marketplace will also be shared in our communications. This means a transparent dialogue on leasing, expenses, market occupancy, and any other relevant metric.
On an individual property level we will always share the financials, disclosing the key performance indicators, such as vacancy, rent growth, or capex.
For example, in one of our communications we might talk about our expectations of replacing the roofs at an apartment complex. “We initially projected that we would have to replace every roof in the complex, but instead, only needed to replace three out of the ten roofs.” We are always certain to provide clarity on thought processes and supporting evidence towards decisions made in the best interest of our investors. We lean on our team of experts in making decisions such as this example, and are always certain to go the extra mile in making it clear why any decision has been made or adjusted.
Another example is just providing a general idea of the value-add program in our business plan and how it is playing out. “We planned to invest $7,500 in renovating units and raise rents by $150 to ensure our interior capital expenditure cash on cash is logical and in line with opportunity costs. We are happy to report that we have hit that target metric.” Furthermore, we always find it important to provide specific supporting data to keep our investors fully aware of the exact reality of the performance.
It is our commitment to provide complete transparency for the duration of our investments. Even in the event that an asset's particular performance has not met expectations for any reason. While rare, due to the painstaking detailed measures we take to ensure our research and execution plans are realistic and conservative, there are certainly times where unforeseen events occur that negatively impact performance.
Perhaps, in reference to the previous example, we have only been able to raise rents to $130. In this case we would provide information on why we anticipate this to change, if realistic, what we are doing to control what’s within our control to ensure the protection and growth of investor capital, and a timely evaluation of the conditions of the marketplace that leads us to make certain decisions moving forward.
It is in our core philosophy to never overpromise, but always strive to overdeliver. We want people to know that we truly care about them, and that we have our finger on our pulse, our hands on the wheel, and our eyes on the road. Our team is committed to open, honest, and timely communication with our partners, in good times and, especially, in those that present unforeseen challenges.
We are always available if you have further questions or would like to discuss something with us on a one-on-one basis and keep this availability for an expanded discussion beyond our standard communication process. This open door policy is how we expect to be treated when we participate with other sponsors, and we believe deeply in this commitment to our investors.
Thank you all again for engaging in this blog and we hope it is valuable for you -- we are extremely grateful to have the opportunity to share our thoughts with everyone and will continue to strive for adding continued value to you through this education platform and through presenting attractive investment opportunities.
Don’t hesitate to reach out to us by scheduling a meeting to discuss your goals and how CF Capital can be a part of your investment strategy.
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