LEM Closes Florida, Canada and Las Vegas Deals

LEM Mezzanine, a direct lender and investor in high-leverage mezzanine debt and preferred equity, recently closed a series of deals in Tampa, Montreal and Las Vegas. The transactions, all with separate borrowers, totaled over $9 million and involved three multifamily properties.

"Each deal was either in a market in which we had previously invested or with an existing borrower," said Jay Eisner, a partner in LEM. "We have definitely seen our volume pick up this year, and much of the increase has been from repeat borrowers."

Two of the three deals involved highly complex ownership structures, and LEM had to stucture its position to accommodate the needs of the borrowers. The Las Vegas deal required LEM to increase its loan amount when the senior lender became constrained by existing cash flow. "The rents on this property were significantly under market. We had a local operator buying the property and we were confident that he could raise rents as units turned over," said Eisner, "We are not constrained by the capital markets, so we were able to underwrite the current market rents and give the borrower credit for the anticipated increases."

LEM structures its investments in a variety of different ways including mezzanine loans, preferred equity and A/B notes and specializes in providing financing in transactions where there is existing first mortgage debt. LEM has worked with a number of different servicers and special servicers to develop structures that either comply with existing loan covenants or can be approved quickly.

LEM, a $200 million fund, focuses on multifamily, office, retail and industrial properties nationwide, generally valued in the $10 million to $60 million range, and makes mezzanine investments of between $1 million and $10 million per property. It provides financing of up to 85% to 90% of the capital structure. LEM's principals include Ira Lubert, Jay Eisner and Herb Miller. The Company's objective is to invest over $100 million per year. LEM and Lubert-Adler are part of Independence Capital Partners, a family of private investment management firms with approximately $3 billion of capital under management.