Generations Allocation Reservation
We continue to believe that “deal-by-deal” capitalization (vs. raising a formal fund) promotes acquisition discipline and will help maximize investment outcomes. As a result, this is our preferred approach to raising equity.
However, as we grow our network, consider acquisitions of varied sizes and look to acquire properties during times of economic uncertainty, we need better visibility into the capacity and desire of our Generations investors. This will allow us to increase our network at the proper pace, close more acquisitions and better tailor allocation over time.
Many of our competitors utilize a legally-binding “blind pool” fund to ascertain investor demand, which eliminates the ability to evaluate each acquisition independently. Others continue to syndicate investments individually by building a network with investment capacity significantly larger than any specific opportunity. This approach can results in a frenzied rush to respond to new offerings and, thus, in disappointment for investors who can’t be accommodated.
We think our Allocation Reservation Program offers a better approach.
How it works
Each year, network members reserve a total dollar amount allocation in our next three to five Generations investments. Here are specific guidelines:
The reservation has a one year time horizon.
Each individual investment will be less than 50% and greater than 15% of the total reserved allocation.
No more than two of the investments will be in the same state.
Investors retain the ability to pass on any individual investment. If any investors chooses to pass on an investment, allocation in subsequent opportunities during the current year is no longer guaranteed.
Allocation reservations are not legally binding.
When we have a new offering, we will email you details about the investment (usually in the form of our preliminary Investor Summary) along with the amount of allocation you are guaranteed in that offering. As with offerings prior to the implementation of this program, you will have the option to verify the amount, request additional allocation or pass. Should you request a higher amount, we'll notify you prior to close if we're able to accommodate the incremental allocation.
Here is a hypothetical breakdown assuming a $300,000 allocation reservation:
$60,000 invested into a 150-unit property in the Minneapolis area.
$110,000 invested into a 200-unit property in the Seattle area.
$80,000 invested into a 100-unit property in the Sacramento area.
$50,000 invested into a 200-unit property in the Spokane area.
How to reserve allocation
Each year, we will circulate a link to a reservation form. Simply fill out the form to confirm the amount you'd like to reserve for the current reservation period (typically this will be the current or immediately upcoming calendar year).
Once received, we will confirm your allocation amount for the year.
Frequently asked questions
Is this now the only way to invest with Glencrest?
No. We still expect to engage in traditional syndication for some of our deals, especially the larger ones. However, reserved allocation will be placed first and is the only way to ensure participation in each of our investments.
How will the process change compared to previous Glencrest deals?
It won’t! You will still:
Receive our initial materials
Make a tentative commitment
Receive our final materials
Sign your legal documents and fund
The only difference is that we will always give you a minimum allocation amount based on your reservation.
What happens if I pass on a particular investment?
There are no legal or economic consequences, but you may lose the remainder of your reserved allocation and may not be invited to participate in future Glencrest opportunities. We will always be open to discussing your individual circumstances and reasoning, but do want you to consider the reservation a serious commitment.
Can I invest more than I’ve reserved into an individual deal?
Possibly. In addition to providing a minimum allocation we will also ask if you would like to increase your investment into a particular deal and may be able to accommodate from time to time. However, we will still expect you to fulfill your reserved allocation for future deals.
Can I increase my reservation along the way?
No. Because allocation reservation will happen annually, though, there will be a regular opportunity to reevaluate and increase (or decrease) your commitment over time.
What happens if you don’t find enough opportunities to fulfill my total reservation?
The commitment ends and you can re-evaluate how much, if anything, you'd like to invest in the coming reservation period (typically the next calendar year).
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If you have any comments or questions about these thoughts, please feel free to reach out by phone or email. We are always happy to talk. Thank you, as always, for your partnership.
