Risk Management techniques and models are strictly applied.
Basalt's investment philosophy is based on focus to create calculated results.
Rule #1 is Capital Preservation.
Basalt's investment philosophy is based on layering the following to identify risks and uncover opportunities to influence favorable risk adjusted returns.
Our disciplined activities include, however are not limited to the following
- Underwriting collateral cash flows,
- Identify cash flow volatility (extension, shortening, interruptions),
- Identifying sponsorship risks,
- Stress structural characteristics,
- Create advantageous pricing,
- Collateral and related security replacement costs,
- Aggressive pursuit of asset supplies.
- Recognize insights by third parties.
Asset Underwriting
Basalt utilizes proprietary underwriting models, distinct in property type, geography and collateral characteristics. Underwriting includes cash flow analysis, sponsorship, documentation and asset specific influences such as micro market trends and additional financing. Cash flows are underwritten from historical financials, current market rents and projected stress of income and expense changes. Market analysis includes employment and demographic trends, a short market narrative and current construction underway and planned.
Basalt identifies risk and quantifies relative value by evaluating term and balloon default risk from asset underwriting including financial market influences of higher interest rate conditions and wider mortgage financing spreads.
Research
Basalt has proprietary analytic models applying market data to asset underwriting cash flow analysis. Basalt leverages third party data and research by incorporating specific situation and stress environment. Basalt focuses on micro market real estate fundamentals including inventory, occupancy rates, absorption, rental rate changes, and new construction starts and completions. Property types are monitored in nearly 60 urban areas for Multifamily, Office, Retail, Industrial, and Hotel.
Basalt identifies risk and quantifies relative value by stressing market data through market growth and market decline scenarios.
Resources, Advisors and Related Parties
"Hired guns" is the approach Basalt applies towards utilizing third party talent and resources.
We recognize the power and value others can provide Basalt for the sole purpose of enhancement.
Basalt has ready access to a broad range of resources.
A sampling shown below compliment more commonly known CMBS resources:
- Chatham Financial -
- Commercial Defeasance -
- eMAXX -
- Markit -
- Bondwatch -
- ABSnet -
