As we close out 2024 and begin 2025, a year in which we will celebrate the 10th year of the Alturas Real Estate Fund, we find ourselves reflecting on this incredible journey. One that has been made possible by the trust and support of you, our partners. From navigating the early days of the Fund during the “retail apocalypse”, to adapting through the challenges and uncertainties of the COVID-19 lockdowns, and now addressing the ripple effects of remote work and higher interest rates. We have demonstrated resilience and the ability to operate and find opportunities in all environments.

This decade of operating the Fund has taught us many valuable lessons, including the importance of staying true to our values and investment philosophies.  With this foundation, we are more confident than ever that so long as we stay true to our principles, we will continue to outperform and deliver great results. To that end, the Fund’s average realized returns for the fourth quarter were 13.01% with total returns of 13.00%. While realized returns for 2024 were 12.58% and total returns were 12.77%.

Our industry has faced significant headwinds over the last several years stemming from rising costs, demand shifts, and elevated interest rates. However, in many cases we are seeing positive shifts in several of these areas including very strong demand for retail space, stabilizing office markets, and less inflation in construction and operating costs. Interest rates remain the most significant obstacle, impacting realized returns as we pay down debt and hold loans for longer durations. The silver lining is that the longer we hold these fixed-rate loans, the more the loans amortize, thus derisking our portfolio.  

While acquiring properties that meet our return and cash flow expectations in this environment remains difficult, we continue to find opportunities (see Q4 Acquisitions and Pipeline). We remain very confident that these properties will be some of our best long-term and will pay significant dividends in the years to come.  

As always, we want to express our continued appreciation for our partnership and look forward to many more successful quarters in the decades to come.