Our investment strategy follows a disciplined execution model that begins with sourcing well-located assets at an attractive basis, continues through operational improvements and active asset management, and creates long-term value through recurring income, appreciation, and capital return opportunities.
Acquisition
We source off-market and lightly marketed opportunities by leveraging local relationships, market expertise, and disciplined underwriting. Assets are acquired at an attractive risk-adjusted basis with investments spanning the risk/return spectrum. Simply, we strive to acquire good fundamental real estate at a sound risk-adjusted basis.
Operations
Following acquisition, we improve NOI through vacant lease-up, marking rents to market, restructuring leases to NNN where appropriate, accretive capital improvement projects, and actively managing each property to enhance income while improving operational efficiency and maintaining strong tenant relationships.
Returns
As assets stabilize, recurring cash flow supports attractive annual distributions while refinancing opportunities, operational scale, and long-term appreciation provide additional value and return of capital to investors.
Why It Works
Tenants rely on these spaces for core business operations, resulting in consistent demand, high retention, and stable occupancy across market cycles. Underlying industries are essential and AI-resistant.
Development remains constrained by a lack of available land, zoning restrictions, NIMBYism, and inadequate development returns, resulting in sustained supply-demand imbalance.
Acquisitions at discounts to replacement cost driven by today’s land values for infill locations as well as the challenge to replicate high coverage light industrial structures. In most instances, it would be impossible to recreate the existing building onsite.
Assets are typically located in infill, high-density areas with proximity to customers and labor, enabling efficient distribution and daily business operations.
Multi-tenant buildings mitigate tenant concentration risk and smooth out lease rollover. Leases carry 3-5-year lease terms, providing consistent opportunities to mark rents to market or improve tenant quality as required.
The small bay industrial market is highly fragmented, with limited institutional ownership. This creates opportunities to acquire assets at attractive pricing and generate value through aggregation and operational improvements.
Functional and infill locations in high-growth submarkets.
3-5-year lease terms, enabling a consistent rental mark-to-market
Vacant lease-up and operational improvement opportunities
Gross-to-NNN lease conversion potential
Accretive capital expenditure
Acquisition at a discount to replacement cost acquisition opportunities
Multi-tenant light industrial
2,000-25,000 SF average unit size
10-30% office buildout, subject to underlying unit size/layout
Drive-in and dock-high loading
14’+ clear heights, subject to unit size
Functional configurations
Criteria
$5M+ minimum acquisition size
5–10% Hornet sponsor co-investment
Core, Core+, and Value-Add strategies
3–10 year hold periods
Investment Strengths
Sustained and resilient tenant demand supported by essential services and last-mile distribution
Durable, diversified rent rolls mitigate tenant concentration risk
Limited new supply and high barriers to entry
Consistent ability to mark rents to market through shorter lease durations
Lower capital expenditure as a percentage of NOI
NNN leases protect NOI margin
Attractive risk-adjusted returns relative to traditional industrial assets
Connect with our team to learn more about current and upcoming investment opportunities and Hornet's investment strategy.
