Areas of Specialty
Aginsky Capital Group is an industry agnostic opportunistic investment firm. We seek out arbitrage opportunities for ourselves and our investors. We have a unique definition of arbitrage: “above average returns with below average risks.”
What We Do
These opportunities are not always easy to find, but they do exist. Though we look across various industry sectors, different stages of company life cycles, multiple geographies, and various parts of the capital stack (both debt and equity), we do specialize in two areas—commercial real estate and small to midsize companies. We have managed a wide range of asset types with a combined value in the hundreds of millions of dollars.
Whether working with our investors’ capital or our own, our team handles all aspects of an investment. We start with the objectives of the investment, time horizon, and identify the appropriate jurisdiction, deal and entity structure, and so much more, all the way to the final negotiations, papering of the deal, closing, and post-acquisition management.
Commercial Real Estate Acquisition
ACG’s real estate investment philosophy is simple and effective. We target high quality commercial real estate assets that have a strong tenant base and an opportunity for us to add value to the asset. We evaluate every asset through three key metrics.
The primary metric is the predicability and certainty of the cash flows generated via rental yield over the investment horizon.
The secondary metric is the opportunity to increase the value of the underlying asset through repositioning or rehabilitation.
The final metric is the external local and macro-economic factors that may affect the value of the underlying asset over time.
ACG’s Real Estate Service Suite
- Company formation and structuring
- Identification of the asset
- Due diligence
- Financial due diligence
- Property inspection
- Legal due diligence
- Negotiation assistance
- Transaction advisory
- Property management
- Leasing services
- Property media and design
- Tangible assets
- Total control of the asset through 100% ownership structure
- Hedge against inflation
- Hedge against currency devaluation
- Capital appreciation opportunity
- Easy to leverage
- Ability of investor / manager to add value
- Predictable and guaranteed cash flow*
Recommended Property Types
ACG has identified five types of real estate properties that we feel would make for a highly lucrative investment over the long-term, allowing us to provide our clients with an attractive return. These are as follows:
Government Leased Buildings
Investing in real estate in which government agencies are tenants is much like investing in a U.S. treasury bond: fixed rental income guaranteed by the full faith and credit of the United States government. However, the difference between a bond and a government-leased property is the rate of return: a government bond will earn an investor 0.5-1.5% on average, while a property will earn a minimum of 7-9%. A property owner leasing the space to the government is also assured the tenant will always pay on time and will never experience financial problems that would impede rental income.
The federal government, the largest user of real estate in the United States, owns and occupies 300 million square meters of office and related space. Currently, 32 million square meters of that space is leased. According to the General Services Administration (GSA), property manager for the federal government, the amount of government-leased space continues to grow at a more rapid pace than that of owned space.
Furthermore, federal government real estate leases require the landlord and the tenant each to pay a portion of the operating expenses. This structure creates an alignment of interests to improve cash flow and help insulate investors from rising operational expenses.
Tiny Home Developments
From 2015 to 2019, tiny homes became a new, niche, popularized on reality TV shows and driven by macro trends such as Airbnb, sustainability, and a downsizing/minimalism ethos. COVID amplified their role via desire to be outside of urban areas, adoption of remote work, and a drastic housing affordability crisis driven by home appreciation.
While there is significant demand for sale and long term lease of tiny homes, the market forces and economics are most compelling for furnished short and medium-term rentals. We believe players operating in this space, especially with scale, can deliver consistent, institutionally friendly results through developing repeatable, branded tiny home resorts in locations around the world.
Food Cart Pods
Food cart pods are a unique niche within the commercial real estate segment. This model allows investors to create the income stream of a multi tenant residential or commercial building without having to build or buy the building. This virtually eliminates large capital expenditures both upfront and during the holding period, maximizing returns. Furthermore, leasing the land on a long-term basis further reduces the overall investment required. By creating a strong brand and a welcoming common area, combined with an installation of all requisite underground utilities for the food carts, we can then sub-lease spaces to individual cart owners at a cost that is far lower to what they would have to incur to lease a brick-and-mortar restaurant space, yet substantially greater than what an unimproved parking lot would typically provide, thereby creating a true win-win model for all stakeholders.
Assisted Living and Adult Daycare Facilities
The demand in the global adult day care services market is projected for a robust growth rate for the next decade, which would be a reflection of a number of factors, such as growing elderly population, attractive government reimbursement policies, availability of low term care service providers, increasing life expectancy, change in family structure among the urban population, and increasing disposable income. Adult day care services are an important type of services, which comprises non-resident support and services related to daily living, nutritional, healthcare and social support. These services are provided to adults and elder people by the strong network of medical professionals and trained staff. Adult day care services play an important role in the provision of transitional care and rehabilitation services. In the most usual way day care centers operate for 5-10 hours in a day and provide various supportive services to the adult population such as meals, medication, general supervision and moral and physical support.
Many of the adult day care centers offer specialized focus on particular disease treatment and provide services related to that disease, such as cardiovascular diseases, services for physically or mentally disabled persons. In addition to support services, many of the adult day care services have taken the initiative to develop a diagnostic and treatment center for the patients present in their center. Such diagnostic services play a vital role in case of chronically ill patients, such as patients with Alzheimer’s disease and other similar situations.
Ancillary to the uptick in apartment rentals has been an increase in self-storage rentals from individuals or families who have needed to store their belongings as they downsize to a smaller residence. Investors in the self-storage space have continued to express optimism even during the recession of 2008-09. Interest in this asset class, particularly from private equity firms, continues to increase because of steady cash flows, high returns, and low loss ratios. In addition, investors like the fact that there are no tenant improvement costs or leasing commissions and also have limited large capital expenditures.
Popularity of the self-storage industry has grown so fast that in the past decade that use has grown from one in every seventeen households to one in every ten. As mentioned above, ownership of a self-storage facility provides relatively high returns with lower costs and without susceptibility to macroeconomic changes – growing businesses and families also require storage services during moves into larger buildings and homes. This asset’s ability to maintain value in both favorable and depressed economic situations makes it a safe bet for any real estate portfolio.