Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed
on April 11, 2005 to invest in a diverse portfolio of real property and real
estate-related investments.
We believe we have operated in such a manner as to qualify as a real estate
investment trust (“REIT”) for federal income tax purposes, commencing
with the taxable year ended December 31, 2006, when we first elected REIT status.
We utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”)
organizational structure to hold all or substantially all of our assets through
our operating partnership, Dividend Capital Total Realty Operating Partnership,
LP (our “Operating Partnership”). Furthermore, our Operating Partnership
wholly owns a taxable REIT subsidiary, DCTRT Leasing Corp. (the “TRS”),
through which we execute certain business transactions that might otherwise
have an adverse impact on our status as a REIT if such business transactions
were to occur directly or indirectly through our Operating Partnership.
We are currently invested in a diverse portfolio of real properties and, to
a lesser extent, real estate-related debt investments. Our investment in real
property consists of office, industrial, and retail properties located in the
United States.
Our Advisor
We are managed by our Advisor, which is wholly owned by our Sponsor. Our Advisor
was formed as a Delaware limited liability company in April 2005. Subject to
oversight by our board of directors, we rely on our Advisor to manage our day-to-day
activities and to implement our investment strategy. In addition, subject to
the oversight, review and approval of our board of directors, our Advisor undertakes
to, among other things, research, identify, review and make investments in and
dispositions of real property and real estate-related investments on our behalf
consistent with our investment policies and objectives. Our Advisor performs
its duties and responsibilities under an advisory agreement with us (the “Advisory
Agreement”) as a fiduciary of ours and our stockholders. The term of the
Advisory Agreement is for one year, subject to renewals by our board of directors
for an unlimited number of successive one-year periods.
Our investment strategy is designed to focus on generating income to support
the quarterly dividend, protecting capital and growing net asset value over
time. We seek to leverage our extensive knowledge of targeted real estate markets
and property types to capitalize on opportunities where there is a disconnect
between our assessment of an investment’s intrinsic value relative to
its market value. In addition, we seek to optimize the value of our portfolio
through strategic financing, diligent asset management and selective asset disposition.
We believe that the real estate market is cyclical, with different demand for
property types at different times. Although we do not invest for the short term,
we are active portfolio managers and we will seek to take advantage of opportunities
to acquire or dispose of assets presented to us by real estate markets. One
reason we focus on multiple property types and markets is to increase our ability
to take advantage of these market cycles. We believe that the more opportunities
we see in which to invest our capital, the more selective we can be in choosing
strategic and accretive investments, which we believe may result in attractive
total returns for our stockholders. Seeing more opportunities also may allow
us to be consistent and meaningful investors throughout different cycles. When
we believe one market is overvalued, we patiently wait and focus on another
market that we believe is overlooked.
We also believe that value generally is based on the investment’s ability
to produce cash flow and not what the next buyer will pay at any point in time.
We generally focus on select, targeted markets that exhibit characteristics
of being supply-constrained with strong demand from tenants seeking quality
space.
Our objective is to build a high-quality, diversified real estate portfolio.
Although there can be no assurance that we will achieve this objective, we intend
to diversify our portfolio by key portfolio attributes including, but not limited
to, (1) property type, (2) target market, with consideration given to geographic
concentrations, (3) average lease terms and portfolio occupancy expectations,
(4) tenant concentrations, including credit and exposure to particular businesses
or industries and (5) debt profile with the goal of maximizing flexibility while
seeking to minimize cost and mitigate the risks associated with changes in interest
rates and debt maturities.
Real Property
We generally utilize a long-term hold strategy for strategic investments within
our portfolio of real estate assets. The majority of our current portfolio consists
of primarily “core” or “core-plus” properties that have
significant operating histories and existing leases whereby a significant portion
of the total investment return is expected to be derived from current income.
In addition, we have invested in a relatively smaller proportion of “value
added” opportunities that have arisen in circumstances where we have determined
that a real property may be situationally undervalued or where product re-positioning,
capital expenditures and/or improved property management may increase cash flows,
and where the total investment return is generally expected to have a relatively
larger component derived from capital appreciation. As described above, although
we do not invest for the short term, we are active portfolio managers and we
will seek to take advantage of opportunities to acquire or dispose of assets
presented to us by the real estate market.