We’ve invested approximately $3.4 million in the acquisition and repositioning of The Lennox, a 100-unit boutique apartment community in Las Vegas. This is our first investment in Nevada, which has been the fastest-growing state in the country over the past two years.

By opportunistically identifying underutilized properties like The Lennox in high-growth areas like Las Vegas, we can continue to target attractive yields, while record asset prices have driven yields on public investments to near-historic lows.

Business plan

Built in 2015, The Lennox is a luxury property in overall excellent condition, but has historically struggled with occupancy. The project’s sponsor, Interwest Capital, plans to invest roughly $970,000 into minor improvements to the community’s leasing center, gym, and pool area to increase marketability, in addition to bringing in a professional management firm.

With these improvements, we are confident that the property can achieve healthy occupancy, which would further widen our already comfortable margin of safety. We expect to be paid back via a sale or refinance in approximately ten years.

Our investment in the project is structured like debt, where we are entitled to earn a fixed annual return of roughly 8% over the life of the investment before the sponsor can earn a return for themselves.

Why we invested

  • Experienced sponsor: Interwest Capital is a real estate firm that focuses on investing in underutilized assets in markets with strong demand fundamentals. Having successfully executed on this strategy across a real estate portfolio worth in excess of $650 million, some of which are located in Las Vegas, they have valuable experience and knowledge of the market.
  • Attractive margin of safety: Interwest has roughly $4.5 million of equity which is junior to our position (not including the additional $970,000 they plan to spend on improvements). This means that the value of the property would have to fall by 22% before the principal of our investment was threatened.
  • Desirable location: The Lennox is located in south Las Vegas, roughly a 15-minute drive from the strip, with easy access to Interstate 15 and close proximity to major employers, including Dignity Health – St. Rose Dominican hospital and the new 55-acre Raiders practice facility.

As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.