Perhaps you’re considering investing in private equity real estate, and you’ve found the Worcester Fund. You’ve heard this investment vehicle has delivered greater-than-8% annualized returns since its inception and 10% for 2018. But you’d like to know more before taking the next step. Keep reading to learn how the Worcester Fund works.
What Is the Worcester Fund?
The Worcester Fund is a private equity real estate fund, an open-ended investment vehicle that provides accredited investors exposure to the lucrative commercial real estate market through a diversified equity stake in Kansas City multifamily properties and commercial real estate loans.
The fund’s manager, Worcester Investments, is comprised of a team of experts in both multifamily real estate and the Kansas City Metropolitan real estate market specifically. This level of expertise has enabled the vertically integrated Worcester Investments which acquires, rehabs, upgrades, and manages multifamily properties in the Greater Kansas City area to return an annualized 30% ROI to investors over the past decade.
How Does the Worcester Fund Work?
Investment strategy
The Worcester Fund’s investment strategy is twofold. The fund’s primary approach is to acquire underperforming multifamily properties in quality Kansas City submarkets and then leverage the company’s vertically integrated business model (including in-house construction and property-management teams) to stabilize these properties and boost both their income performance and market value.
This has proven to be a successful strategy for Worcester Investments, primarily due to the management team’s thorough knowledge of the Kansas City market, specialized focus on multifamily real estate, and the company’s vertical integration, which allows the team to quickly and cost-effectively execute on that knowledge.
A second investment strategy of the fund is to offer private loans for multifamily real estate projects to borrowers with above-average and high credit scores. The ability to underwrite loans quickly gives the Worcester Fund a competitive advantage over banks and other conventional lenders, and as a result, the fund has enjoyed good success in this area of investment.
Simply put,the Worcester Fund finds, funds, fixes, and facilities great commercial real estate opportunities in the Kansas City metro area. Here are a few ways this approach creates unique advantages for the fund and its investors.
Key advantages
1. Deep knowledge of the market.
The management team’s decade-plus exclusive focus on Kansas City allows the Worcester Fund to benefit from a unique insight for identifying the best investment properties and commercial-loan opportunities in the area.
2. Expertise in multifamily properties.
By limiting the team’s area of focus to a single segment of the broad commercial real estate market multifamily the Worcester Fund is able to make better operating decisions and ultimately create a better customer experience, which can both increase a property’s revenue potential and its overall value.
3. Vertically integrated business model.
The company has built in-house business units capable of handling a wide range of real estate functions from acquisitions, to building, to rehabs and renovations, to property management. This enables the Worcester Fund to benefit from both economies of scale and greater efficiency at executing on every aspect of the fund’s investment properties.
Current specifications
| Assets under management: | $6,000,000+ |
| Targeted rate of return: | 9-12% |
| Minimum investment: | $50,000 |
| Distribution frequency: | Quarterly |
| Lockup period: | 48 months |
Learn About How the Worcester Fund Works
To learn more, visit the Worcester Fund’s main page, review the fund’s 2018 update, or read the official Worcester Fund Private Placement Memorandum.
