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What is the Fund size? How are Fund assets selected?

The Fund has no target equity limit. However, it only adds properties that meet the Fund’s risk and return objectives. Origin intends to hold from 30 to 50 assets in the Fund at any given time, and the mix of assets depends on the market cycle.

Origin benefits from the intellectual capital of its diverse team members, who together have over 70 years of real estate investing experience. Each week, Origin has an investment committee meeting in which all acquisition and investment management personnel discuss the existing business plans of portfolio assets and any potential acquisitions. Origin evaluates each opportunity based on a risk-return spectrum and approves deals that exhibit superior risk-adjusted returns. Pricing models determine whether a potential acquisition will meet the Fund’s investment objectives, and each assumption in the models is analyzed and questioned. New acquisition pricing strategies, hold-sell analyses, and modifications to existing business plans are presented and discussed.

Origin’s investment process is a crucial tool in achieving the Fund’s investment objectives. Investment opportunities are screened, fully underwritten, thoroughly reviewed, documented and approved in the process outlined below. Senior management leads the process while Origin principals provide feedback throughout each step.

• Deal screening. Before making an investment, opportunities are screened and reviewed in a manner that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. The review process may entail a broad evaluation of significant business, tax, accounting and legal issues, whose evaluation is further refined to varying degrees based on the type of investment. This evaluation determines whether an opportunity merits further consideration. Outside consultants, legal advisors, brokers, accountants, prospective venture partners and other third parties may be involved during this process.
• Desktop analysis. Acquisition officers, in conjunction with acquisition analysts, build a model to price the opportunity to determine applicable pricing parameters.
• Market research. For real property assets, the acquisition team performs a site inspection (if not performed during the deal screening process) and review in-depth market information from resources including local brokers and Origin’s regional offices. The investment manager also employs Multilytics®, Origin’s proprietary suite of machine-learning models that generate rent growth projections in the Fund’s target markets. In addition, the opportunity will be previewed with prospective lender partners.
• Full underwriting. Investment underwriting is performed by the acquisitions and investment management teams. Argus financial models are used for all underwriting except when completing apartment analysis. In collaboration with Realogic Analytics, Origin has developed a proprietary Excel financial model for apartment underwriting. A variety of assumptions are used to derive property value in the apartment Excel model and the Argus model, including but not limited to the following: market rents, free rent, renewal probability, targeted physical and economic occupancy, downtime prior to securing a new tenant, tenant improvements, leasing and sale, commissions, capital improvements, reserves, growth rates, initial cap rates, residual cap rates, closing costs, holding period, debt, cash on cash yields (leveraged and un-leveraged), internal rates of return (leveraged and un-leveraged) and multiple returns on invested capital (leveraged and un-leveraged).
• Investment management testing. The investment management team and its analysts test the defensibility of the acquisition team’s assumptions about future rents, capital expenditures, interest rates and exit capitalization rates. The investment management team is responsible for implementing these model business plans after acquisition and acts as a check and balance on the acquisition team.
• Final investment committee approval. Upon completion of full underwriting, the investment team prepares a final investment memorandum that confirms or highlights any variances from the preliminary investment committee approval. Following investment committee approval, the investment is approved with funding subject to attorney verification of terms negotiated in the respective legal documentation.