Who is Lucern Capital Partners?
Lucern Capital Partners is a fully integrated real estate investment firm focused on acquiring opportunistic and value-add real estate investments in markets throughout the Northeast, Mid-Atlantic, and Southeast regions of the United States. The firm’s primary focus is delivering superior risk-adjusted returns by applying a value-oriented philosophy to real estate investing. Lucern aims to identify assets that are mismanaged or underperforming and that can be improved through active asset management and a value-add business plan.
What type of real estate assets does Lucern Capital Partners acquire?
The Lucern team has transacted on over $2.5B of real estate debt and equity investments and has the knowledge, experience, and capital to execute quickly and efficiently. We will invest in class B to A- multifamily, mixed-use and hotel assets (preferably extended stay status) that we believe can be improved with a value-add business plan.
Why does Lucern Capital Partners invest in properties located along the U.S. East Coast?
We are selective in the markets in which we invest. Before investing in a new market, we take time to perform due diligence and develop a network of professional relationships that we can leverage to learn more about the city, real estate trends, demographics and other key attributes that we factor into our model before making an investment.
The cities where we have traditionally acquired properties have demonstrated strong growth, have a young demographic, and offer a better cost of living than large cities but with similar amenities (i.e., parks, arts & entertainment, restaurants, schools, and jobs).
Why doesn’t Lucern Capital Partners acquire new construction or turn-key properties?
We invest opportunistically in properties that we believe can be improved with a value-add business plan and active asset management. Our property investments have generally been owned by the same operator or family for years and are in need of upgrades and improvements to meet market demand.
We have established a successful track record of acquiring property assets below market value and making value add improvements that generated both ongoing cash flow and long-term value appreciation. New construction and turn-key properties can be easier to work with but are generally expensive and do not offer much upside return potential for our investors.
What is active asset management?
Active asset management means that we stay involved with each property after the acquisition. We have a property management company called Lucern Living that manages all our properties located in New Jersey and Pennsylvania MSAs. In other regions, we have established partnerships with property managers who we schedule regular calls with and receive reports to stay engaged with how the property is performing. We believe that we can drive value and returns for investors by staying actively involved in the property ownership.
How does Lucern Capital Partners create value and income?
Lucern Capital Partners’ team has over 55 years of real estate investment experience and has had success with identifying opportunistic value-add investments that generate ongoing cash flow, long-term value appreciation and passive income.
We typically acquire assets that are below market value but in locations that are being gentrified. With capital improvements, we believe we can create both short-term and long-term value, attracting a renter base that can afford to pay higher rents.
How can investing in real estate build wealth?
If acquired correctly, which is key, multifamily and mixed-use assets can produce money for investors in three ways.
- Investors can potentially earn ongoing cash flow from rental activity.
- Investment properties can potentially earn value appreciation over the long-term from capital improvements that increase rent rates and generate income from other revenue sources such as parking facilities.
Real estate investments can carry advantageous tax benefits. These vary based on each investor’s personal financial situation, so we encourage investors to speak to their personal accountant.
What is the minimum investment amount?
In the case of Lucern Multifamily Value Fund I, LP, investors must be accredited. We occasionally offer syndication investments where we can work with non-accredited investors under certain circumstances.
The definition of Accredited Investor from investor.gov is: An Accredited Investor, in the context of a natural person, includes anyone who:
- Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence)
How do I invest with Lucern Capital Partners?
Accredited investors who decide to invest with Lucern Capital Partners can request access to our Investor Portal to complete the subscription agreement and other onboarding requirements.
Once an investor, our Investor Relations team will “call capital” for the pledged funds to be transferred to Lucern Capital Partners once an investment has been identified.
As investor in Lucern Multifamily Value Fund I, LP, what returns can I expect?
The goal is to create both short-term and long-term income. Short-term income comes in the form of net cash flow which is the net profit left over after we have collected rents and paid operating expenses and loan payments. Long-term income comes once we sell a property at a profit, typically five to seven years after the asset has been acquired.
What is IRR?
IRR can be confusing. Another way of thinking about IRR is that when the fund has ended, our goal is that investors will have earned an average of 12% annually on their principal investment remaining each year they are invested in the fund.
How is risk mitigated?
We perform a disciplined due diligence process before investing in a property asset, looking at the market, trends, how the asset performed and what value we believe we can generate. Just as importantly we put significant money into our own deals, meaning we have skin in the game right along with our investors.
Why should I invest in Lucern Capital Partners and not invest in an individual property?
You can certainly invest in individual properties. That is how we got started. However, it is very time-consuming, especially if you want to invest in multifamily and mixed-use assets. Finding and acquiring good deals in growing markets is very competitive. Property management can be cumbersome as well. Most people recognize real estate as a strong investment avenue, but few actually enjoy the commitment it takes to do it personally.
Lucern Capital Partners offers a way to invest in real estate without the headaches of being a landlord. Even better, because we’re good at it and have a proven system in place, you would likely find the returns with us to be as good or possibly better than if you invested on your own. Of course, no returns are guaranteed.