LEM Capital, L.P. closed the firm’s fourth discretionary fund in August at its original $300 million target. Fund IV will invest exclusively in Class B multifamily properties in primary and secondary U.S. markets that offer an opportunity to add value and increase revenue through property and amenity upgrades as well as improved property management. An integral part of the strategy combines the local, long-term market knowledge and day-to-day management of the firm’s network of nationwide operating partners with LEM’s disciplined investment selection, rigorous due diligence process and intensive asset management oversight, all led by the firm’s partners. This is the firm’s second fund dedicated to this strategy.
Fund IV received limited partner commitments from several exclusively existing institutional investors in addition to new domestic and international pension funds, fund-of-funds, family offices and high net worth individuals.
“We remain extremely appreciative of all of our long-term investors, many of whom have been with us since 2002 and saw us work hard to preserve their capital and deliver a profit in all of our funds active through the Great Recession. We are also fortunate to have developed many new relationships for Fund IV.” said Jay Eisner, one of LEM Capital’s founding partners.
The Fund has already deployed 56% of committed capital into 16 investments representing 18 properties and 4,981 units across 11 distinct U.S. submarkets. The balance of the capital is expected to be deployed over the course of the next 12-18 months across similar investments. “Driving this focus on Class B multifamily are the long-term demographic and lifestyle shifts we identified in 2010 that continue to help generate strong performance and positive future growth prospects for this strategy. The growing millennial population and retiring baby boomers are sharing a higher propensity to rent. The hangover of the Great Recession combined with more student debt, tighter mortgage credit and delays in major life events like marriage and children have created a growing trend of longer-term rental households and an increasing permanent renter base in the US,” said Herb Miller, also an LEM Capital founding partner. “We seek to provide renters with a like-new experience at a moderate price point. A place they will be proud to call home.”
LEM expects the fund to employ approximately 70% leverage and to acquire $1 billion worth of multifamily properties.
About LEM Capital
LEM Capital is a real estate private equity firm with a 15-year track record focused on protecting investors downside and building portfolios to help deliver dependable current cash flow and equity upside through good and bad cycles.
Multifamily experts acquiring well-located apartment properties where LEM can add value and increase rents through physical upgrades and implementation of better management practices. The firm’s approach combines the local, long-term market knowledge and day-to-day management of its network of nationwide operating partners with LEM’s disciplined investment selection, rigorous due diligence process and intensive asset management oversight, all led by the firm’s partners. Their goal is to deliver attractive risk-adjusted returns to its investors while safeguarding their capital.
Since 2002, LEM has raised almost $1 billion in investor commitments and invested over $6.3 billion in real estate contributing to their expertise in structuring, execution and asset management. This includes acquiring over 15,000 value-add apartment units since 2011.