The underlying strategy in all RIO investments is to seek above average absolute returns, with low risk and low volatility. RIO endeavors to identify unrecognized opportunities through a proprietary network of local owners/operators and relationships with banks, brokers, trustees, law firms, portfolio servicers, title companies and other real estate service providers.
RIO’s real estate philosophy is generally guided by the fundamental premise that future cash flow, not “trophy status” or fashion, ultimately determines the value of an asset. RIO believes that rigorous due diligence, the use of conservative assumptions in projecting cash flows, and careful assessment of possible downside scenarios are the best methods for consistently generating returns. Although RIO aggressively manages the capital structure of its investments, it has always adhered to a policy of prudent leverage. By virtue of its close relationship with financial institutions RIO has been able to obtain the best financing terms available in the market in order to provide each transaction with the greatest protection possible in a downside scenario.
In evaluating an investment opportunity, one of RIO’s primary considerations is the potential exit strategy. To that end, the firm focuses on making investments in well located assets that should appeal to a wide group of subsequent buyers. In addition, factors that reduce the value of an asset (such as ground leases, preemptive rights, long-term management contracts or other restrictions on the owner’s control) are closely scrutinized during due diligence to determine the effects on value. Finally, RIO strives to seek investments with multiple exit strategies including private one-off sales, portfolio sales within common asset classes, mergers with existing public entities, or offerings of stand-alone companies.