The Shadow Credit Mechanism:
Hamilton Equity Partners possesses an intimate knowledge of real estate markets and has utilized this wealth of experience to spotlight potential investment areas of profitability. Hamilton has highlighted shadow credit opportunities whose face of higher risk is concealing a secure and stable core, many times in the form of government based support. An investor may buy a building and enter into a lease agreement with a non-profit entity for their use, a seemingly high risk. However, if this non-profit enterprise’s source of operational funding is from the government, it holds much greater stability. Hamilton’s founders have utilized this strategy to invest in viable properties and are now looking to expand this concept to nursing homes and assisted living facilities. Hamilton works with the knowledge that state and federal programs, such as Medicare and Medicaid, serve as the principal funding of these businesses. Hamilton is seeking to expand on its previous experience and expertise and invite other investors to recognize and profit from its true, genuine value, sourced by government funding.
Financial Institution Support:
Hamilton’s principals and management team have long standing and trusted relationships with prominent institutions throughout the banking and financial industries. Hamilton has successfully financed new asset classes by educating and collaborating with capital partners. These deep rooted relationships have helped fund over a billion dollars of real estate investments. As investments are aggregated, Hamilton will leverage these affiliations across the capital structure to further finance the portfolio and maximize investor return.
Net Lease Benefits:
In a net leasing transaction, a company purchases a property and leases it to a tenant who operates a business in the property. When investing in hotels or commercial buildings, the return is in constant fluctuation due to changes of occupancy and other factors, and therefore offers a higher rate of return due to the increased risk. In a net lease, the property and building is owned by the investor, while the tenant pays the lease and is responsible for all operating expenses. In general, net lease transactions are a conservative investment, with a low, but consistent rate of return.
Hamilton is seeking to focus on net-lease properties that maximize potential yields, possessing a greater rate of return with minimized risk due to the stable funding of government support. Skilled nursing homes and assisted living facilities are attractive investment opportunities because of the shadow credit that is actually supporting the enterprise’s success. On average, these facilities’ leases yield 10%, which is significantly higher than traditional net lease properties. Skilled nursing homes and assisted living facilities receive two thirds of their revenue from government based sources, with Medicaid supplying 45% of their revenue, Medicare 21%, and 10% from private health insurance, totaling a 76% revenue stream from shadow credit sources. Hamilton seeks to invest in these properties as a preferred asset, minimizing risk while simultaneously maximizing reward.