Royal Oak Strategy
The Royal Oak Strategy is to acquire "mission-critical", income producing, net leased industrial and office buildings occupied by strong, credit-worthy tenants under long-term lease contracts. The income derived from the diversified pool of stabilized properties is used to pay the fixed rate, long-term mortgage debt and other operating expenses of the Company. At the discretion of the Royal Oak Board of Directors, the Company may distribute the net cash flow remaining, after the payment of all Company obligations, as a dividend to its shareholders. Royal Oak adheres to a Property Selection Criteria to guide all acquisitions. The Criteria are conservative in nature to ensure, as much as possible, that Royal Oak acquires buildings that have demand not only by the current tenants, but also for future potential tenants. The underlying strategy is to purchase buildings that are well constructed and in good physical shape to serve the purposes for which they were built, in areas with demand for the type of facility being acquired, with rents in place that are at, or below, current market rents. The theory being that if a building is well built, located in an area with demand for this type of building, has a tenant in possession that is credit-worthy and paying rent that is at or below market under a long-term lease, then Royal Oak should be able to yield a consistent cash flow from the investment into that building. Should the tenant not remain in the building, Royal Oak should be able to find a new tenant that will pay market rent and the cash flow the investment was expected to yield should continue indefinitely.
Critical to the Royal Oak Strategy, is governance from a Board of Directors, including a committee of Independent Directors. The main role of the Independent Directors is to act on behalf of the Royal Oak shareholders. As such, the Independent Directors maintain oversight of the external Asset Manager and Property Manager to ensure adherence to the management contracts and that potential conflicts of interest are appropriate and fully disclosed. All Board Members and Independent Directors are shareholders of Royal Oak.