January 24, 2024
LEM Capital Announces 2023 Year in Review and 2024 Value-Add Multifamily Transaction Goals
Philadelphia, PA – LEM Capital, L.P. (“LEM” or the “Firm”) today reflected on a challenging 2023 and announced their 2024 multifamily acquisitions objectives.
“We are optimistic that 2024 should be a more active acquisitions year and feel fortunate to have over $250 million of dry powder to deploy,” said Greg Biester, Partner, and Co-Head of Investments. “Last year, multifamily transaction volume nationwide was down precipitously, driven primarily by the Federal Reserve’s dramatic increases in interest rates which created volatility in the capital markets. We elected to be extremely prudent and center our focus on optimizing property operations while only selectively pursuing sales and acquisitions opportunities.”
In addition to the fluctuations in capital markets, 2023 also brought a major surge in near-term new multifamily supply. This normalized rent growth to more typical levels (3-4%) versus the double-digit growth experienced in the two prior years. “We were active yet patient market participants last year,” said Allison Bradshaw, Partner, and Co-Head of Investments. “Our constant focus on downside protection and our experience up to and through the Great Financial Crisis has influenced our approach to investing, structuring, and operating our multifamily assets. Looking forward, we expect the capital markets should stabilize and we will be selective in seeking compelling, high-quality assets that can offer outsized returns and downside protection.”
LEM’s value-add multifamily investment program targets equity investments ranging between $5 million and $35 million per property, with total capitalizations ranging from $30 million to $100 million. LEM’s value-add business plans typically contemplate upgrades to apartment interiors and common areas with a particular focus on amenities, seeking to provide a ‘like-new’ experience at a moderate price point for the average working-class renter. “We continue to work closely with our Operating Partners, from deal sourcing to business plan execution while leveraging our over-20 years of experience to help navigate the current market environment effectively,” said Jennifer Clausen, Partner, and Head of Investor Relations.
About LEM Capital
LEM Capital is a real estate private equity firm with a 21-year track record focused on protecting investors’ downside and building portfolios to help deliver dependable current cash flow and equity upside through various market cycles.
The team consists of multifamily experts that seek to acquire well-located apartment properties where LEM can add value to help 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. LEM’s goal is to deliver attractive risk-adjusted returns to its investors while safeguarding capital.
Since 2002, LEM has raised approximately $1.8 billion in investor commitments and invested over $9.1 billion in real estate contributing to their expertise in structuring, execution and asset management. This includes acquiring over 27,000 value-add apartment units since 2011.
Notes – All data as of December 31, 2023, unless otherwise noted. In considering the Firm’s 2024 goals, reader should bear in mind these are hypothetical and are not a guarantee of future results.