Financial Governance Framework

Capital Discipline

Long-term ownership requires conservative leverage, structured reserves, and disciplined capital allocation.

Capital Structure Policy

Algonquian Real Estate, LLC prioritizes financial durability over expansion speed. Capital decisions are evaluated through a risk-management framework designed to protect long-term asset performance.

Our capital structure emphasizes:

  • Conservative loan-to-value parameters
  • Minimum stabilized DSCR of 1.25x or greater
  • Stress-tested underwriting assumptions
  • Preference for fixed-rate or predictably structured debt
  • Maintenance of liquidity at acquisition

We do not pursue aggressive leverage, speculative refinancing assumptions, or capital structures that compromise long-term solvency.

Operating & Capital Reserves

Each acquisition must demonstrate adequate liquidity at closing and sustainable reserve coverage.

Operating Reserves
• Minimum 3–6 months of operating expenses
• Debt service coverage buffer
• Vacancy contingency allowance

Capital Expenditure Reserves
• Annual per-unit reserve allocation
• Deferred maintenance review prior to closing
• Structural, mechanical, and roofing risk assessment

Reserve strength is evaluated before any distribution decisions are made.

Cash Flow Allocation Framework

Net operating income is allocated in the following priority order:

1. Operating expenses
2. Debt service
3. Capital reserve funding
4. Contingency retention
5. Distributions (when appropriate)

Distributions remain secondary to asset stability.

Growth Governance

Expansion is conditioned upon:

• Proven operational performance
• Stable historical debt coverage
• Preserved liquidity
• Market conditions consistent with underwriting assumptions

Growth will not compromise capital strength or underwriting standards.

Built for Long-Term Stability

Our capital strategy is designed for sustainable ownership within Connecticut small multifamily markets.

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