THE COPERNICO SOVEREIGN STRATEGY
Copernico Sovereign invests in multifamily real estate in mature and growing markets in the Sunbelt United States that are currently mismanaged or have upside potential through capital improvements.
Copernico Sovereign expects multifamily properties to rebound to pre-pandemic levels more quickly than other real estate asset classes, as the spread between multifamily cap rates and the U.S. ten-year treasury yield is at a historic low, providing cash flow above historical levels.
The multifamily market has outperformed other real estate asset classes during the pandemic with strong rent collections. Copernico Sovereign believes the current U.S. demographic trends remain favorable for the Sunbelt states and the multifamily market. Sunbelt states have been experiencing strong population growth due to job growth, business-friendly laws, and lower state income taxes.
• Investments will generally have current cash flow at the time of purchase. Through favorable financing, value add supervision, and execution of property or unit upgrades, Copernico Sovereign seeks to maximize returns on already stable investments.
• Copernico Sovereign will target real estate assets that can be repositioned, such as assets that have been poorly managed or can see rent growth with capital investment by improving units and common areas. Copernico Sovereign may acquire good real estate backed by problematic capital structures in need of repayment.
• Copernico Sovereign will look to acquire assets where rents and occupancies would benefit from value add capital improvements. Copernico Soveriegn’s construction expertise will also be instrumental in performing due diligence for new transactions.
All of the Portfolio Investments made by Copernico Sovereign and dispositions of Portfolio Investments will require unanimous approval of the Investment Committee.