Investment Strategy
LEM’s Value Add Strategy
Brookhaven Apartments in Atlanta, Georgia
LEM’s core mission of protecting our investment partners’ capital begins with our sole focus on multifamily properties. The firm’s strategy focuses predominantly on improving mid-sized Class B apartment communities in primary and secondary markets nationwide. Historically, multifamily has been the least volatile real estate asset class during downturns while still offering strong upside potential during upcycles. Within multifamily, Class B provides one of the most attractive investment opportunities due to the imbalance between the strong and growing demand and limited new supply of these units.
The key is how we execute this strategy. LEM has carefully and thoughtfully built a nationwide network of operating partners, each with expertise and operational strength in the markets and submarkets they know best. They are smart, passionate and committed business partners who invest significant capital alongside us on every investment.
We structure our transactions to create a strong alignment of interests with our operating partners designed to deliver the best possible results for our investment partners.
We structure our investment offerings with performance based fees only after our investment partners have received their preferred return and a return of 100% of their capital and other provision that demonstrate our respect for our investment partners’ capital.
Deal InquiriesWhy an Operating Partner Model?
Local Knowledge, Vertically Integrated
LEM's operating partners have deep experience in their target markets and by maintaining full control over property and construction management, maximize returns for our investment partners.
Meaningful Operating Partner Investment
We employ a variety of investment structures designed to create an alignment of interests and incentivize performance.
Geographic Diversification
We invest with operating partners in over 29 metropolitan areas who have a deep understanding of the micro dynamics in their regional markets, which helps LEM to construct geographically diverse portfolios for our investment partners.
Senior-Level Oversight
Key principals at our operating partners are involved in all phases of executing the value-add business plan and overseeing day-to-day operations.
Enhanced Deal Flow
We work in tandem with our operating partners to source, evaluate and close marketed, off-market and recapitalization opportunities.
Joint Oversight
LEM works closely with each operating partner to track performance, optimize the value-add business plan and drive day-to-day operations.
Investment Selection Driven by Thoughtful Research
Investment decisions are based on a qualitative and quantitative research process that has been refined over the past 20 years. Our thorough and methodical process evaluates the location, construction quality, business plan and operating partner for each transaction. Every investment is underpinned by our on-going study of the demographic and lifestyle trends that support the firm’s multifamily investment strategy.
Investment Selection Driven by Thoughtful Research
Investment decisions are based on a qualitative and quantitative research process that has been refined over the past 20 years. Our thorough and methodical process evaluates the location, construction quality, business plan and operating partner for each transaction. Every investment is underpinned by our on-going study of the demographic and lifestyle trends that support the firm’s multifamily investment strategy.
Why Class B Multifamily?
Growing Renter Population
More people of all ages, ethnicities and incomes are renting longer and more permanently due to various economic and lifestyle factors.
Student Debt Overhang
Student loan debt, which stands at $1.75 trillion as of Q3 2024, a 52% increase over the past decade. This debt is burdening would-be homebuyers and creating a large population of longer-term renters.
Delays in Life Events
Major life decisions such as marriage, children and home buying are being delayed longer than in previous generations. In 2023, the US Birth Rate fell to the lowest it's been in more than a century.
Changing Homeownership Trends
Multiple demographic drivers have changed the outlook on homeownership. The cost of owning a home continues to outpace the cost of renting. U.S. homebuyers today face average monthly mortgage payments that are 37% higher than the average monthly apartment rent. Also, higher for longer interest rates will further reduce the stock of homes for re-sale, as more people will stay in their current homes with the mortgage rates previously locked in.
Long-Term Renter Base
Limited savings, rising interest rates, credit worthiness, and long-term debt are among the obstacles precluding many individuals from purchasing homes.
Supply Deficit
While demand remains high for Class B apartments, very few units catering to the average renter have been built in the past decade. This sector is over 94.6% occupied as of Q2 2024.
*Sources include: US Census Bureau, Yardi® Matrix (www.yardimatrix.com), Integra Realty Resources. Reprinted with permission. All rights reserved., The State of the Nation’s Housing 2017 by the Joint Center for Housing Studies of Harvard University, “Hanson, Melanie. “Student Loan Debt Statistics” EducationData.org, July 15,2024, https://educationdata.org/student-loan-debt-statistics, CNBC; Reasons Why Millennial’s Hunt for Convenience & Asset-Lite Lifestyle – Cerebral-Overload; “US fertility rate dropped to lowest in a century as births dipped in 2023”, April 25, 2024, CNN Health, New Mortgage Payments Now Above Multifamily Rents, CBRE, Statistics for Residential Mortgages, FHFA, National Mortgage Database, June 30, 2022,