A Corporate Update During COVID-19
Dear Bamboo Investor:
First and foremost, we hope this communication is finding you and those closest to you safe and healthy. As these are challenging times for all of us, we want to make sure that we take care of our families, our team and our investors.
Bamboo Equity Partners has been in business for over eight years and was a biproduct of the 2008 global recession. Over this time, each of you has helped us build, grow and refine our business. We have responded to challenges, sourced profitable opportunities, and most importantly, partnered with you to make relationships the foundation of everything we do.
We have been monitoring the impacts of the COVID-19 pandemic and how this phenomenon might impact our investors, tenants, vendors and employees. At BEP, we are taking proactive steps to protect our employees and the hundreds of tenants occupying our properties. All the while, we remain diligent and steadfast with our investment objectives for our projects - objectives that have been tested and proven for almost a decade.
Many of our more than 150 investment partners have chosen to invest with Bamboo Equity Partners because of our meticulous focus on risk management. We also invest a significant portion of our personal capital alongside our investors to ensure that we have aligned our interests. Bamboo was founded at the tail end of the last recession and we know that proactive risk management practices are key to protecting and growing capital in times of uncertainty. We believe certain choices we have made, including investment in stable markets, focusing on high-quality well-located assets, low leverage at fixed rates and buying right, will pay off should fundamentals deteriorate during an economic downturn.
We are implementing protocols following the recommendations of the Centers for Disease Control (CDC), The World Health Origination (WHO) and our national and local government officials. Our team has been working remotely with very limited in-person contact for weeks now. During this time of physical separation, we have ramped up our abilities to respond to our tenant needs as well as diligently underwrite each and every opportunity that we are presented with.
The leadership team at Bamboo takes this situation very serious and has been monitoring numerous trusted resources as information becomes available, while continuing to communicate amongst our team. Given this we have taken the following steps:
We are moving forward with all fundraising efforts. Bamboo intends to be well capitalized to take advantage of the new pricing environment which will emerge, and our team will continue to look for transactions that have outsized return potential. We have always been a fair, transparent and respected real estate manager. Our reputation has given us the opportunity to acquire solid off-market properties, because we give people dignity as they sell assets. Our underwriting has always been presented to sellers such that they can fully understand how we arrived at a fair price. We believe that in the current market, undercapitalized and unsophisticated operators will need to adjust their portfolios and we would like to be there to support the market while making sound purchases for our investors.
Delaying all deals that are not yet committed for 30 days. We have opportunities in both the Saint Louis market as well as other midwestern cities. These transactions are off market with good fundamentals and are opportunities which will complement our growing portfolio. We are simply asking the sellers to proceed with the legal paperwork but delay any firm commitment to let the dust settle on all the information flowing on COVID-19. We need to minimize any employee travel, which impacts our ability to do due diligence on these investments.
We are moving forward with all investments with commitments in place and due diligence completed. (All onsite due diligence has previously been completed on these investments.) We have asked the sellers of these projects for a reasonable 30-60 day extension to ensure financing is available at the most advantageous terms we can find in the market today.
Bamboo believes that given the current market qualities, we should see wonderful buying opportunities in the coming weeks/months and are working to prepare accurate evaluations of the potential investments. Markets have cycles – during the down cycles, we strive to be well positioned to grow our investor base, grow our tenant base and prove our fundamentals again.
We thank you for your investment with Bamboo, and we will continue to work diligently on the performance of our assets. We have been fortunate not to identify any material effects to our operations or cash flow to date, but we remain cognizant that it’s still early and the COVID-19 situation is still very fluid. As is common in times like these, assets will deviate from their projections, both for better and for worse. We do not anticipate changes to any of the quarterly distribution rates at this time. We are in the process of refinancing select assets to capture the benefit of the current interest rate environment, and globally, we are recognizing the value of having a diversified tenant mix with staggered lease terms in a volatile time. As always, we encourage you to reach out with any questions. We hope and pray for a quick resolution of this virus as well as the safety and protection of all your loved ones.