For Owners

Liquidity, Without Selling Your Asset

LEX is a new equity recapitalization option that allows you to create partial liquidity in a specific asset at an attractive price while maintaining management and control.

Real Estate Owners

LEX Lets You

Raise Capital

Raise non-voting, perpetual equity at an attractive price

Maintain Control

Maintain control and management of the asset, replace existing limited partners

Increase Demand

Access more investors, which can drive demand and higher pricing

After Your IPO

Use Your LEX Proceeds To

Replace LPs

Replace existing limited partners who have their own liquidity needs

Improve Deal Economics

Monetize a portion of value and participate in future upside, or pay down expensive / accruing capital

Redeploy Capital

Redeploy your own capital into higher growth opportunities

How Securitization Works

Lifecycle of a LEX Deal

1. Select An Asset

  • Owner identifies an asset 
  • LEX conducts due diligence on a prospective offering
  • LEX and owner agree on terms of the offering
  • No cost to owner for preliminary legal and due diligence consultation

2. Structure Public Entity

  • LEX structures the security 
  • LEX coordinates with third parties 
  • Owner provides financials to third party auditors 
  • LEX works through the SEC process to get offering qualified 
  • LEX coordinates sales plan, marketing materials and “road shows”
  • Costs of the offering included in LEX placement fee  

3. IPO & Trading

  • LEX sells shares of IPO to public investors 
  • LEX supports owner with ongoing reporting and tax requirements
  • Owner maintains full control and can sell the entirety of the asset at their sole discretion 
  • Cost of ongoing reporting requirements borne by public shareholders 

Is Your Asset a Fit?

LEX Asset Requirements

Asset Types

  • Any asset type
  • US or Canadian market
  • Core or Core Plus

Structure

  • One set of consolidated financials per offering
  • Maximum LTV of 75% post equity recap
  • Certain tax elections required

Financials

  • Stabilized asset with positive cash flow
  • Limited planned capital expenditures 
  • Minimum 12 months of operating history 
  • Distributable cash that provides attractive yields to investors

Asset Size

  • Minimum offering size of $10 million
  • Owner must retain minimum 5% of equity
  • Offering size may be constrained by existing loan covenants and/or local transfer tax costs

The LEX Securitization Process

Step 1 Heading

  • Owner identifies an asset 
  • LEX conducts due diligence on a prospective offering
  • LEX and owner agree on terms of the offering
  • No cost to owner for preliminary legal and due diligence consultation
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The LEX Securitization Process

Step 2 Heading

  • LEX structures the security 
  • LEX coordinates with third parties 
  • Owner provides financials to third party auditors 
  • LEX works through the SEC process to get offering qualified 
  • LEX coordinates sales plan, marketing materials and “road shows”
  • Costs of the offering included in LEX placement fee  
Section CTA

The LEX Securitization Process

Step 3 Heading

  • LEX sells shares of IPO to public investors 
  • LEX supports owner with ongoing reporting requirements
  • Owner issues one new annual K-1
  • Owner maintains full control and can sell the entirety of the asset at their sole discretion 
  • Cost of ongoing reporting requirements borne by public shareholders 
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Resonates with Real Estate Owners

The LEX Model

Newly
Stabilized Assets

  • Take chips off the table
  • Redeploy capital 
  • Realize performance fees / promotes

Replace Existing
Limited Partners

  • LPs want liquidity options at a reasonable price
  • Pay down expensive / accruing capital

Tap Into a
New Capital Source

  • Fund capital improvements / tenant costs
  • Perpetual equity investors  

Case Study: The first LEX IPO

Gateway Garage Partners

  • Ticker: GWYGU
  • $1 million equity offering (4,000 shares priced at $250)
  • $24 million total asset value
  • 600-space parking garage in downtown Portland, ME 
  • Established operating history with stable cash flow (long-term corporate leases and variable transient income)
  • Proceeds used to fund capital improvements and return equity to owner
share price is illustrative

The Post-Offering Structure

A LEX Org Chart

  • Public investors have fungible partnership interests through a new Special Purpose Vehicle (Public SPV)  
  • Public SPV becomes the issuer and raises capital through the IPO 
  • Operating Company continues to hold title as a pass-through entity
  • The GP acts as the managing member of Public SPV, affording the GP all control rights
  • The Existing SPV becomes pari passu with Public SPV 
  • Property manager continues to manage day-to-day operations 

FAQs

What are the costs to an owner?

Who pays for the costs associated with the Initial Property Offering?

What voting rights will the public investors have?

How long does it take to get an asset onto the platform?

What fees can the owner charge the public shareholders?

Can an owner sell their asset after using the LEX platform?

Can an owner require capital calls from the new public investors?

What are the owner’s obligations post-closing?

At what point in the deal lifecycle can an owner use LEX for an offering?

Can an owner do an offering on a fund or portfolio of assets?

How is LEX Markets different than other crowdfunding platforms?

How are LEX Markets offerings different than tradable REITs?

Learn More About

LEX platform and its solutions for CRE Owners and Sponsors

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