Due to the extraordinary amount of capital in the marketplace vying for institutional grade self storage and apartment properties, market CAP rates in these asset classes are at historic lows.  These CAP rates and the low cost of long-term debt, make for a compelling argument for new development within these asset classes in select submarkets and locations within Arizona and across the Southwest.  While an investment strategy involving the acquisition and/or improvement of existing income producing properties can yield attractive long-term returns, for various reasons, VIVO believes that a strategy involving the development of new Class ‘A’ properties will result in disproportionately higher risk adjusted returns on the invested capital.  Further, depending upon the investor and associated partnership structure, new development can create a pipeline of "REIT ready" properties that can be purchased off market by the investor at a future time.