We are deeply saddened to confirm the passing of our Chairman and CEO Doug Shorenstein.
Doug had been ill for some time and fought a courageous battle with his illness. Through it all, he maintained a positive and hopeful outlook, and he remained steadfastly focused on serving his family, his colleagues and his community.
We will miss him dearly.
Shorenstein generates attractive risk-adjusted returns by investing in properties in which value is temporarily impaired due to leasing, operating, physical, or capitalization issues and then re-positioning them so they have sustainable leasing advantages and a durable income stream by virtue of location, quality, amenities, and other features that distinguishes them in the marketplace. Shorenstein executes this strategy by combining sophisticated capital market and investment expertise with extensive asset management, leasing, operating, and construction capabilities.
Real estate is a cyclical business with its cycles determined, in large part, by capital flows. A sound investment strategy must recognize the importance of these cycles and requires a commitment to maintain pricing discipline when buying and a willingness and an ability to move quickly to sell when the value enhancement program has been completed and the capital markets are fully valuing asset and market fundamentals.
Shorenstein believes that leverage should be employed at a level that provides a meaningful enhancement to investment returns but not be so high that a fundamentally sound asset will be put at risk during periods when leasing markets soften or capital markets become constrained.
In selecting among investment opportunities, careful assessment must be made of the risk profile of the various alternatives. In commercial office buildings, risk comes in two basic forms: rental rate risk and vacancy risk, with the greatest investment risk coming from the substantial costs that are incurred as a result of vacancy. Shorenstein believes that both of these risks are best mitigated by investing in properties that will always be preferred business locations and appeal to a wide range of tenants, ensuring that there will be demand across cycles. These risks are then further mitigated by operating these properties with an unwavering focus on responsive and cost-effective service to tenants so that opportunities to expand and retain tenants on the most favorable terms are maximized.