LEM Capital closes fourth fund

LEM Capital 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.

“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,” said Herb Miller, an LEM Capital founding partner. “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 United States.”

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.

The fund has already deployed 56 percent 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 to 18 months across similar investments.

LEM expects the fund to employ approximately 70 percent leverage and to acquire $1 billion of multifamily properties.