UrbanAmerica investing in inner city properties.

At times, the wisdom of a successful business strategy is summed. up in one word -- risk.

Few real estate firms would have seen the value of investing in neighborhoods like Queens West or Upper Harlem just three years ago. History is proving them wrong. In its attempt to take advantage of such corporate shortsightedness, UrbanAmerica - an investment company that buys commercial and retail properties in "under-served urban markets" - might end up reaping huge benefits even, in these economically unstable times.

The company, which was formed in 1998 by a group of experienced real estate executives, identifies viable commercial, institutional, and retail space in underdeveloped areas of cities like New York, Washington, Atlanta, Philadelphia, and Detroit. UrbanAmerica's real estate portfolio includes a 255,773 SF Lakes Mall in Lauderdale Lakes, Fla., a 144,466 SF East River Park Center in Washington, DC, and a 95,917 SF Dolphin Plaza in Opa Locka, Fla.

The company recently made its first investment in the New York City area, with the purchase of three buildings in Mount Vernon for $8.45 million. With a total of 74,623 SF, the properties acquired were 60 South Third St., 54 South Third St. and 24 South Third St. All three properties are 100 % occupied by New York State and Westchester County agencies. The firm acquires and upgrades these properties, turning them into attractive, revenue-producing investments.

"There are very good institutional quality real estate opportunities in urban communities that, for the most part, are overlooked by most investors," says UrbanAmera president Richmond McCoy. "We acquire properties, we bring in new tenants, and we seek new opportunities."

"We typically seek to invest our money in communities where there was already a demonstrated public private partnership developed," he continues. "That's a sign that these neighborhoods are improving, and then we look 'at certain typical demographic ratios. On a retail component, we look for densely populated neighborhoods that can support the market."

The firm has a list of additional requirements for the cities in which it invests: they must have at least one university, a large, preferably international, airport, and governments interested in the revitalization of "distressed areas. UrbanAmerica's hope is 'that their initial investment will spark off other developments in the neighborhood, making the value of the whole market go up.

"We understand and can manage every aspect of the real estate asset, through which we enhance the 'value of our investments immediately and for the long-term," says Hal Reiff, UrbanAmerica's chief financial office, in the company's official statement. "We also provide long-term profitability for investors by acquiring properties that meet the Community Reinvestment Act requirement."

Despite it's youth, the company has been able to establish investment relationships with a number of high-profile financial institutions. Its list of limited partners includes Deutsche Bank, Dime Savings Bank, Citibank, J.P Morgan, Summit Bank, and the Prudential Insurance Company, among others.

"I've been in the [real estate] business for 20 years, and I knew a lot of those people from before, so we have been able to develop a lot of relationships that way," explains McCoy. "They trust us."

So far, he has been very happy with how the company is fairing.

"Our strategy is quite comprehensive, and we endeavor to create benefits for every party involved," he says. "Best of all, we have the acquisition and the track record -- established in just [a few months] -- to prove that we mean business and that we are doing business as promised."