Our mission at LEX is to empower wealth creation by solving real estate’s access and liquidity problems.

Andrew Carnegie famously said that 90% of millionaires become so through owning real estate. Many of today’s wealthiest investors have proven him right. But the rules of real estate investing favor the rich; high investment minimums, accreditation requirements, long minimum hold times, and private offering structures all make it difficult or impossible for average investors to participate. The result is that only investors who are already at least moderately wealthy are allowed behind the velvet rope of opportunities to build more wealth through real estate investing.

LEX’s mission is to change that.

The Access Problem

So few have benefited from commercial real estate investments for a handful of reasons. 

High cost of entry: large amounts of capital are traditionally required to build or purchase buildings outright, or to join a deal as a limited partner. 

Exclusivity: Real estate is still largely a relationship game - even if an individual investor did have the economic means to participate in a large transaction, these deals are often “country club deals” and take place through private offerings behind closed doors or within a close-knit community of high-net-worth industry players. There is no centralized market for non-insiders to find single-property real estate investment opportunities and to participate side-by-side with the institutional insiders.

Accreditation requirements: A legal designation called accreditation allows only certain wealthy individuals to invest in the majority of direct commercial real estate transactions. The accreditation requirement serves an important purpose in preventing less affluent investors from taking losses in private investments that lack the disclosure and registration requirements of public securities. In practice, however, the requirement also serves as a legal barrier that limits individuals seeking to capitalize on the economic benefits of commercial real estate ownership.

LEX’s approach to the access problem allows all US investors the ability to purchase equity shares of individual CRE assets for the low entry-point of $250/share.

The Liquidity Problem

Traditionally, investing directly in real estate locks up your capital for 5+ years (a “hold period”) with no guarantee it won’t turn into 10+ years. If you’re a minority partner in a real estate investment, you generally don’t have a say in when you can sell your stake. Understandably, this doesn’t make sense for most investors; both individuals and institutions. 

A lack of liquidity makes an investment more daunting, because your capital is “locked up” and can’t be accessed if conditions shift or an unplanned need to exit the investment arises.

With this constraint and additional risk of illiquidity comes an impact on pricing, known as an “illiquidity discount” or “liquidity premium”, meaning that an investor is willing to pay some % less for an asset because of the lack of liquidity if they need to exit the investment.

The liquidity problem exists both on the supply side and the demand side of the marketplace: many current CRE investors are tied up in limited partnership positions and are unable to find liquidity for their stake (giving LEX an avenue to unlock “supply”), and many potential buyers of that real estate are less motivated or unable to purchase because of the lack of liquidity (giving LEX an avenue to unlock “demand”).

LEX’s approach to the liquidity problem is to “take buildings public” as a capital source for current investors stuck without liquidity, and to allow the new public investors to buy and sell these real estate shares whenever they wish on the LEX Trading System (“LEX ATS”).

The LEX ATS automatically executes matching buy orders and sell orders from 9:30am to 4:00pm on weekdays, and is an open system that welcomes all market participants to the table: institutional investors, market makers, other brokerages, and LEX users in the LEX app.

LEX’s ATS can’t guarantee liquidity, but we are doing more to enable it than any other direct real estate investment platform. 

As we overcome the liquidity issue, LEX is adding value to the CRE landscape by removing a market inefficiency and allowing these CRE assets to trade nearer to their true asset value.

Unlocking the Tools of Wealth Creation

Real estate has created enormous wealth for countless generations of America’s richest families. In the earliest days of LEX, we knew that our goal was for a single share purchased through LEX to bring as many of the same benefits as possible that owning a building outright provides.

This goal guided our structuring of a LEX investment.

Investors buying shares of a building on LEX are buying equity in a partnership vehicle that owns a minority stake of equity in a building.

This structure is enables wealth creation in several ways:

Cash flow: As the tenants pay rent, the shareholders receive distributions. The distributions for each asset are expected to be paid quarterly. And while the distributions are not guaranteed, the owner of the building must pay distributions to shareholders if they pay distributions to themself.

Tax benefits: Being structured as a partnership allows many of the benefits of CRE ownership to pass through to the shareholder as K-1 investments (not 1099 investments). 

Alignment & Protection: Because the owner retains a majority of the equity, they still have “skin in the game” and are motivated to operate the asset efficiently and attempt to produce healthy returns for shareholders. While the asset owner retains control of the building, there are several investor protections built into the LEX offering structure, including protections against insider sales, outsized management fees, etc.

Real estate deserves liquidity, and all investors deserve access. Solving these two problems in the real estate market will enable a new generation of more widespread wealth creation.

For our media friends, here’s the short, short version of LEX

LEX is a venture-backed commercial real estate securities marketplace. LEX allows both accredited and non-accredited investors to buy and sell shares of individual commercial real estate assets without lockups, starting at $250. The trading platform is powered by Nasdaq to provide the same robust, low latency, and high-performance trading features used by 70+ global markets around the world. LEX allows property owners to unlock equity while retaining operational control of their properties.
Follow us on Twitter, LinkedIn, or Instagram to engage with our social communities.
For any media inquiries: please send us a note to press@lex-markets.com and we’ll get back to you as soon as possible.

We’re hiring, so learn more about joining the team democratizing the 17 trillion dollar U.S. commercial real estate market.

See careers


Our Partners

PROUDLY BACKED BY
AS SEEN IN

_______________________

All investment services are offered by LEX Markets LLC, 
Member FINRA/SIPCBrokerCheck profile here. Additional important disclosures are available here

LEX Markets offers unlisted equity securities issued by commercial real estate owners. Investments in real estate are subject to risks including fluctuations in rental rates, changes in the terms and availability of other financing supporting the property, changes in taxes, environmental and zoning laws, reduced tenant demand, and others. Investors must be prepared to bear the economic risk of such an investment for an indefinite period of time and be able to withstand a total loss of their investment.  

The information contained on this website has been prepared without reference to any particular user’s investment requirements or financial situation. Potential investors are encouraged to consult with professional tax, legal, and financial advisors before making any investment into a securities offering. Please consider carefully the investment objectives, risks, transaction costs, and other expenses related to an investment prior to deciding to invest. This website is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can only be made pursuant to a qualified investor receiving official offering documentation where lawful under applicable law. Please consider the Offering Circular and subscription documents for each security carefully before making an investment decision. They contain important information regarding the risks, transaction costs, and other expenses related to the investments which you should consider in light of your investment objectives.

Any link or reference herein to financial publications is for INFORMATIONAL PURPOSES ONLY. LEX Markets does not endorse, favor, or recommend  any third-party website, commercial product, process ,or service. LEX Markets has provided third party links to bring to your attention the mention of LEX Markets in the news. No consideration was paid by LEX Markets or its affiliates for any news coverage. LEX Markets cannot verify the accuracy, completeness, or quality of the content of any third party website, or any products or services offered via those websites. To the extent any linked third party website collects personal information from end-users, LEXMarkets cannot be held liable for such commercial activities.

_______________________

The LEX-Markets.com web site and all hosted intellectual property is owned by LEX Markets Corp.