Our primary objectives are to preserve and enhance investor value by increasing cash flow from operations, achieving sustainable growth and realizing long-term capital appreciation. The strategies we execute to achieve these objectives include:
Maximize Cash Flow Through Internal Growth. As an owner and manager of Class A office properties, we are executing strategies to achieve significant internal cash flow growth over time, primarily through the lease-up of currently vacant space, mark-to-market of expiring leases, and embedded rental rate growth through contractual annual rate increases. As an experienced building management company operating in Dallas-Fort Worth, Chicago, Houston, Phoenix and Los Angeles,Younan Properties generates incremental rental revenue growth by rolling existing leases to market rents in many of our markets.
Intensive Asset and Property Management
Our proactive and Intensive asset and property management strategy and our customer-focused marketing approach enable us to maximize operating performance and is key to our growth strategy. This strategy encompasses a number of operating initiatives designed to maintain high tenant retention rates, and to lower operating costs, including the following:
- Devoting significant resources to building and cultivating our relationships with commercial real estate executives;
- Maintaining regional offices in markets in which we have a significant Class A office leasing and management presence such as Dallas-Fort Worth, Chicago and Houston;
- Developing strong customer relationships by delivering customized space solutions to our tenants;
- Driving a significant volume of leasing transactions by using creative approaches. We manage portfolio risk by structuring lease expirations to avoid, among other things, having multiple leases expire in the same market in a relatively short period of time;
- Evaluating potential tenants based on third-party and internal assessments of creditworthiness; and using our purchasing power and market knowledge to reduce our operating costs and those of our tenants.
Disciplined Acquisition Strategy in High Growth Markets. We continue to grow earnings through the strategic acquisition of high-quality, Class A office properties in our existing markets as well as other U.S. major office markets that meet our acquisition and leasing market selection criteria.
Our overall acquisition strategy focuses on acquiring properties in markets that generally are characterized by their diverse industry base, attractive supply and demand ratios and appeal to investors. We target attractively priced properties that complement our existing portfolio from a risk management and asset quality perspective.
Capitalize on Attractive Market Opportunity. The recent economic downturn has produced a favorable environment in which to acquire high-quality Class A office properties at attractive prices, relative to both replacement cost and to the cost basis of competitive assets in our markets. Dislocations in the commercial real estate financing markets will create significant opportunities within our existing markets to acquire assets from owners facing operational and financial stress. Based on our operational expertise and capital resources, we believe that we are well-positioned to acquire assets from distressed owners and other motivated sellers within our existing markets and in other major U.S. markets, which meet our investment criteria.