Schmelzle Capital (S-Cap) is a private equity real estate investment and operating company owned through Schmelzle & Associates. We invest across a broad range of geographical markets and product types and utilize our experience as hands-on, boots on the ground operators to add value. Sound underwriting and strict due diligence is the key to this approach. We take positions up and down the capital stack while strictly adhering to our philosophy of taking only those positions which allow us to control our own destiny. We typically seek niche opportunities created by temporary capital dislocations, perceived complexity, or an inefficient sales process - including off market deals. While we manage real estate assets which would fall under a conservative core plus strategy we believe one of our competitive advantages as a boutique firm is our ability to spot mispricing and quickly adapt to changing market conditions. Our current focus is in the opportunistic space where we see value in distressed sellers holding legacy assets or non-performing real estate loans. Of particular interest are loans of the 2003-2007 vintage which were originally underwritten to proforma income which never came to fruition and are now faced with values significantly below maturity balances. In some cases, the underlying assets are performing nicely but are simply over leveraged. In other situations the collateral is suffering from a host of operational and deferred maintenance issues, handcuffed to owners who have simply given up, mismanaged or don’t have the funds or lender approval to properly position the asset. This is often where our hands on approach, sound underwriting, operational expertise and capital injection create value.
We typically seek one off, small to mid-cap transactions. We have found this space to be too small and below the radar of multi-billion dollar funds and too large and complex for individual investors lacking expertise. By employing our institutional experience and approach to small and mid cap deals we are able to create superior risk adjusted returns.