Market Cycles and Counter-cyclical Investing
The real estate market is cyclical, with periods of growth and contraction. The point of equilibrium is the cost to construct new buildings. The four distinct phases of the cycle are Recession, Recovery, Expansion and Contraction, and they move in that order. If you know where we are in the current cycle, and where we've been, you can accurately predict where we are headed. While the market is now in the Recession Phase of the current cycle, the timing is perfect to reap big profits down the road, in the expansion and contraction phase.

One thing is certain, cycles will repeat–that’s why they’re called cycles. Those with the discipline to invest contrarian, like Grace Realty Group, will reap the rewards.

When the market is down, what is the only direction it can go?
Likewise, when the market is up, what is the only direction it can go?

Value-added Investing
GRG searches for possible acquisitions only in situations where values can be greatly enhanced by making changes to the property's physical structure, management or marketing. This is known as value-added investing.

Buying Below Replacement Cost
When considering a purchase, one of the most important criteria for investment is to ascertain the replacement cost of the target property. GRG only purchases property at a price well below its replacement cost, one of the key ingredients to profiting from redevelopment. Even with high quality refurbishment, total project cost is far less than replacement.

When purchasing distressed property, it is paramount to determine that the flaws that brought the price down in the first place, whether physical, financial or managerial, are easily correctable. GRG's management team has over thirty years of construction experience to draw on when considering the physical attributes of an acquisition candidate.
 
An additional benefit to this strategy is that it discourages new construction competition. Since new construction developers are forced to charge enough rent to service debt based on much higher starting numbers, they cannot compete with the rents GRG can offer tenants.

 
Buy Equity, Sell Cash Flow
Grace Realty Group's business model is to purchase commercial property substantially below replacement cost (buy equity), refurbish and stabilize and sell to yield investors (sell cash flow). It is a matter of taking a distressed property or seller and, through strategic repositioning, dramatically increase the income stream, and sell to those who invest for steady, monthly yield.