Most failed real‑estate projects fail twice: first in underwriting, then in execution. This is the framework we use internally to evaluate a project before any fund capital is committed. It is also the framework we share with investors when we walk them through a new pipeline asset.
Location is the only thing you cannot fix later
Every other dimension of a project — design, finishes, marketing, even financing — can be re‑worked mid‑cycle. Location cannot. So we underwrite it first and we are honest about what we are buying.
- Macro‑location: city, neighbourhood, transit, school district, walkability
- Micro‑location: the specific plot, orientation, view corridors, green frontage
- Trend direction: is this neighbourhood improving or stable, and what's the catalyst
- Comparable transactions: what has sold or leased in the last 24 months on the same block
Permitting is binary
A project either has clean permits and an approved planning path, or it has political risk. We do not buy political risk on the fund's balance sheet. Pre‑acquisition we work with local counsel to confirm permitting status; we walk away from projects where the planning path requires variances or environmental waivers we cannot verify.
Construction execution is where margin gets made or lost
We operate as developer end‑to‑end — Trade Estate Development handles project delivery in‑house with trusted local subcontractors. This gives us margin discipline that pass‑through GP structures cannot match. It also means construction risk sits with the developer, not the fund.
Construction risk sits with the developer, not the fund. The fund underwrites the developer.
Exit logic before subscription
Every project has a written exit memo before fund capital is committed. Three exit paths must be modeled: long‑hold rental, partial sale to institutional buyer, full sale of the asset. If two of three exits do not pencil at the target IRR, the project does not enter the fund.