Approach to Investment
Real Estate and Hospitality assets with growth potential
At Fay, we believe that the commercial real estate, restaurants, boutique and independent hotel segments offer some of the best investment opportunities in the current investment environment due to a combination of growing consumer demand and opportunities for outsized performance improvement caused through inconsistent execution by inexperienced owners and operators in this niche.
Primary urban markets and select leisure destinations
We focus on primary urban markets and select leisure destinations with diversified and growing demand characteristics and high barriers to entry. We also selectively pursue opportunities in secondary markets with high average daily rates where the boutique hotel product we create stands out among the competition.
Controlling equity position
We pursue control oriented equity investments that generally take the form of whole ownership or joint venture structures. We don’t have any target range of investments, but we will selectively invest in assets requiring both smaller and larger commitments through our co-investors network.
Existing hotels in good physical condition that will benefit from our rigorous approach to asset management and a change in management and/or brand.
Renovation and repositioning
Existing hotels in desirable locations and in need of renovation and/or market repositioning. These properties are well located, but are failing to perform to their full potential due to a combination of their physical state and management and/or brand affiliation.
Buildings (office, government, warehouse, medical, etc.) that are well located and suitable for conversion to hotels. These properties can often be acquired with limited competition, well below replacement cost, and are often eligible for historic tax credits.
Select ground-up development projects where supply and demand fundamentals support new construction and land can be purchased at a favorable price with entitlements already in place.
We maintain a moderate leverage strategy and do not employ excessive debt (which creates excessive risk) to reach targeted returns. We target unlevered return hurdles consistent with risk and then derive targeted equity return hurdles based on leverage levels.
“Through effectively managing assets and executing acquisitions with high potential, we endeavour to continue growing with our new and existing network of investors.”
— Sandeep Wadhwa, Founder