Salus’ portfolio includes a diverse set of income-producing assets that are located throughout the U.S. Properties are selected following a rigorous due diligence process and typically carry favorable debt structures. In each transaction, Salus purchases a property on a cash basis and is able to finance it on favorable terms given the quality of the asset. They are purchased with a 65% to 75% loan-to-value ratio, with debt amortized over 25 years to 30 years.
GSA properties usually possess lower operating risks than other real estate investments. These properties are mission-critical facilities that may provide investors long-term stability and rental income because they are usually built-to-suit facilities designed with unique IT and specific infrastructure requirements that may render it prohibitive for a tenant to relocate. There are also environmental benefits associated with these properties, as most have a LEED (Leadership in Energy and Environmental Designation) designation or Green Building certification. LEED designations not only protect the environment and conserve resources, but these buildings are intended to achieve considerable annual operating cost savings. The oldest of these properties currently in the portfolio was built in 1995. All properties are leased to federal government agencies on a long-term basis.
Salus as Investor and Asset Manager
Salus serves as the lead investor and primary Asset Manager on each property in the program, typically providing 15% to 20% of the equity required for each acquisition on the same basis as its investor/partners. To further maximize partner returns asset management fees are charged at a fixed rate never exceeding one quarter of one percent (.25%) or 1% of invested equity.
In order to maximize transparency and minimize operational risk Salus retains CB Richard Ellis/Richmond Asset Management Services to perform at Salus’ direction, all transactions involving funds, including the collections of rents, expense payments and the payment of all partnership distributions.
CB Richard Ellis carries a $50million insurance policy covering liability and theft with Salus and its entities as named insured with a per occurrence limit of $2million.