The underlying strategy in all Galaxy investments is to seek above-average absolute returns with low risk and low volatility. Galaxy endeavors to identify unrecognized opportunities through a network of local owners/operators and relationships with banks, brokers, trustees, law firms, portfolio servicers, title companies, and other real estate service providers.

 

Galaxy’s real estate philosophy is generally guided by the fundamental premise that future cash flow, not “trophy status” or fashion, ultimately determines the value of an asset. Galaxy believes that rigorous due diligence, the use of conservative assumptions in projecting cash flows, and careful assessment of possible downside scenarios are the best methods for consistently generating returns.

 

Galaxy aggressively manages the capital structure of its investments, and it has always adhered to a policy of prudent leverage. By virtue of its close relationship with financial institutions, Galaxy has been able to obtain the best financing terms available in the market in order to provide each transaction with the greatest protection possible in a downside scenario.

 

In evaluating an investment opportunity, one of Galaxy’s primary considerations is the potential exit strategy. The firm focuses on making investments in well-located assets that should appeal to a wide group of subsequent buyers. In addition, factors that reduce the value of an asset (such as ground leases, preemptive rights, long-term management contracts, or other restrictions on the owner’s control) are closely scrutinized during due diligence to determine the effects on value. Galaxy strives to seek investments with multiple exit strategies including private and institutional one-off sales and portfolio sales within common asset classes.

 

Galaxy has effectively applied this investment strategy throughout a variety of market conditions. As competitive pressures in Southern California reduce expected yields, Galaxy expands the geographic and product scope of its investment activities while maintaining the discipline of its historically successful strategy.