Our Strategies
Real Estate
Acquire stabilized real estate in geographies with improving demographics and moderate leverage. Focus on industrial, multifamily, and select opportunities in office and hospitality. Acquire undermanaged, well located assets. Ultimately maximize value utilizing strategic improvements and amenities. Post-acquisition, institute best in class property management.
Industrial Real Estate Strategy
Industrial real estate is experiencing strong growth from multiple drivers. The growth in e-commerce will continue to increase demand for modern Class A warehouses, especially as the pandemic compels consumers to shop more online over visiting stores. New warehouse demand is also being driven by retailers, wholesalers and logistics companies who must recalibrate operations to serve customers on a timelier basis while lowering costs. Lastly, demand is coming from manufacturers as they diversify product sourcing away from China, which is becoming known as the “China plus one” strategy. Population demographics highlight additional regions of opportunity. As the Southeast and Southwest enjoy the highest population growth rates over the next five years, there will be a significant increase of Class A warehouse demand. To help satisfy warehouse demand, a number of retail-to-industrial warehouse distributions are being initiated.
Multifamily Housing Strategy
The Multifamily sector has performed better than most property sectors – only industrial held up better – during the 2020 recession. By 2022, national Multifamily Housing investment is expected to rebound to pre-pandemic levels. The suburban Multifamily sector in the Midwest and Southeast is expected to enjoy the most solid market performance over the next few years, driven by growth in population and jobs. The new urban to suburban trend could lead to additional demand for Multifamily properties in suburbs near gateway cities. Strategic “location, location, location” has never been more key in the current market environment. Properties in growth markets, located close to public transportation, and possessing scarcity value due to limited inventory availability should prosper.
Global Supply Chain
COVID-19 has accelerated the rate of change in the global supply chain. The main drivers are new demand for inventory management and the prevention of supply chain interruption, created by record growth in e-commerce, and the move to diversify manufacturing away from China. A recent example is Peleton Interactives (a bike fitness company) and its acquisition of Precor Inc., a US manufacturer of fitness equipment. Previously, Peleton was sourcing all products from China, and experienced both shipment delays and lost customer orders. Another example is the growing demand for new cold storage capacity to aid in the distribution of COVID-19 related vaccines. BOP will take advantage of the growth and supply chain opportunities to identify the most compelling risk adjusted investments.
Cannabis/Hemp
As Cannabis and Hemp gain legal status in the US and globally, there will be opportunity to invest in many aspects of the growing industry. As of the November elections, 36 states have approved of medical marijuana and 15 states have approved marijuana for recreational use. Regulations overseeing the cultivation and distribution of medical marijuana vary per state but are generally strict and highly monitored. We believe that as these programs mature and expand, due to greater consumer acceptance, and growing medical application, new investment opportunities will arise. States will most likely grant more cultivation and distribution licenses as things progress.
Hemp was legalized in the 2018 United States Farm Bill. The Bill removed hemp (previously defined as part of the cannabis classification) and derivatives of cannabis with low concentrations of the psychoactive compound THC from the definition of a controlled substance. Since the 2018 legislation, CBD (the non-psychoactive cannabinoid of marijuana) has become a popular ingredient in new consumer products such as moisturizers, vitamins, gummies and even dog treats. Black Opal is investigating direct and peripheral industry opportunities on a global basis.
Alternative Energy
The march to harness Alternative Energy or clean renewable energy sources, including Wind, Solar, Hydroelectric, and more recently compressed natural gas continues. Alternative Energy initiatives to supplement traditional fossil fuel sources to arrest the growth of greenhouse gases will be a leading priority in the new Biden Administration. Initiated by the Paris Climate Accord, the majority of global governments recognize the challenge.
Within the US, the private sector has led the pursuit of developing alternative energy including electric cars, solar energy cells, new battery technology, energy storage, and renewable energy production projects. Although currently contributing 11% of total US energy consumption, alternative energy is experiencing considerable growth. Examples range from startup companies that install energy panels to consulting services that advise businesses on efficient energy utilization. Our expectation is that the Biden Administration will extend expiring tax credit within the sector to encourage additional investment. Black opal will leverage its alternative energy networks to identify attractive investment opportunities.
Sponsored Fund & Club Vehicles
Black Opal Partners structures and develops Funds/Club investor vehicles for its investor base. These vehicles allow investors to participate in our strategies while achieving enhanced flexibility.
