Lionstone Investments Closes Latest Value-Add Fund at $745M

Surpassing its initial target, the company re-engaged the investors from its previous fund and added new overseas partners.

Lionstone Investments, of Houston, has reached the final close of its U.S. Value-Add Five at $745 million.

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Lionstone describes LVA Five as “a diversified value-add real estate investment vehicle that uses advanced analytics to identify, acquire and fix transitional assets in locations where innovation, economic vitality and today’s most productive companies and people intersect.”

The $745 million was raised across a commingled fund and co-investment side car and well exceeded the target raise of $625 million.

All of the partners from the previous fund, Lionstone Value-Add Four, recommitted to LVA Five, in addition to which the newer fund added new investors from Asia and the Middle East.

LVA Four closed in January 2017 and ultimately invested $500 million in assembling a portfolio of nine multifamily, office and mixed-use retail assets across the country. LVA Five reportedly will pursue the same underlying investment strategy, but “with the benefit of more evolved and advanced data analytic tools,” according to Lionstone.

777 Aviation Blvd., El Segundo, Calif.
777 Aviation Blvd., El Segundo, Calif. Image courtesy of Lionstone Investments

LVA Five has already acquired two assets and is under contract to purchase a just-delivered multifamily project in Raleigh, N.C.

According to Chief Investment Officer Bryan Sanchez, Lionstone believes that opportunity exists to improve and reposition multifamily, office and retail assets, especially those located within mixed-use developments.

Dan Dubrowski, Lionstone co-founder and head of capital formation, acknowledged the support of parent company Columbia Threadneedle Investments.

Launched in 2005, Lionstone’s value-add program has invested in and advised on more than $2.4 billion of equity in value-add properties.

Not wasting time

The most recent acquisition by LVA Five, in June 2019, was of 777 Aviation Blvd., El Segundo, Calif. Built in 1968, the 318,618-square-foot property was converted in 2017 into Class A creative office space.

The building is currently 80 percent occupied, a Lionstone spokesperson told Commercial Property Executive.

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