Wellington Management, Inc. (WMI) oversees a portfolio of more than 90 commercial buildings located throughout the Twin Cities metropolitan area. This $350 million collection of office, retail and industrial properties has been carefully assembled over 30 years since WMI was established in 1984. The ownership of these properties is held in fifty-four different limited liability companies (LLCs). WMI contracts with each of these LLCs to provide development, leasing, property management, finance and accounting services.
WMI projects have the following characteristics:
- Currently, there are 58 individual investors who are members in one or more of the 54 LLCs in the WMI portfolio;
- Steve Wellington, President of WMI, is typically the Chief Manager as well as being an investor in most of these LLCs.
- The investor members of these LLCs retain voting rights and remain active participants in their investments through annual budget meetings and regular financial reports;
- WMI tends to be a long term holder of real estate. While we are never adverse to selling an asset for an appropriate price, the objective is long term cash flow and gradual reduction of debt;
- The investment returns vary project by project. Typically, WMI looks to identify properties to acquire or develop which offer annual 9-12% cash-on-cash returns while also providing reasonable opportunity for appreciation;
- While these investments often offer a modest amount of tax shelter, WMI looks for opportunities for solid cash flow and appreciation potential rather than tax advantages;
- The company typically acquires or develops two to four properties annually.