Why We Invest in Our Own EB-5 Projects (And You Should Too)
It is one thing to be an investment manager and quite another to be an investor yourself. At The LCP Group we are both. We create and offer investment opportunities for our clients and we are also investors in our own projects. It doesn’t just mean that we have skin in the game, it means that we only succeed when our investors succeed. LCP owns and operates a network of USCIS approved Regional Centers covering most major markets in the United States. Why do we invest in our own EB-5 projects and why should you – the answers can be found below.
1. Strong Underwriting
The LCP Group has been a pioneer in both public and private real estate investments for more than 45 years. As an investment management firm, we do deal sourcing and financial structuring, value analysis and business plan creation, project diligence, business plan execution and disposition and value realization.
The success of our projects has been driven by our investment team’s rigorous financial analysis and valuation modeling for underwriting investment properties and determining the viability of potential acquisitions and development opportunities. We work with top tier providers such as appraisers, environmental review firms and local market experts to complete our underwriting and use their expertise to draw conclusions on investment opportunities.
2. Potential for Profit
Historically, EB-5 projects have rarely provided more than a quarter point of returns for investors. However, LCP’s EB-5 projects are carefully selected and go through extensive analysis with the goal to provide attractive risk-adjusted return on investment.
“Unlike traditional EB-5 projects where investors receive a de minimis fixed return with no upside potential, our projects provide higher than average return on investment,” says Rich Marquard, Executive Vice President of Investment Operations at The LCP Group, L.P. “We are confident in the projected yield of our investment opportunities and it only makes sense that we invest our own money to show how confident we are in the project. In other words, we put our money where our mouth is.”
3. Years of Experience
LCP’s leadership team is comprised of alumni of Yale, Columbia University, Wharton School at University of Pennsylvania, Cornell University and Boston University to name just a few. With more than 100 years of combined experience sourcing and structuring more than $10 billion across all real estate asset classes, our team is able to provide unparalleled expertise.
E. Robert Roskind founded The LCP Group in 1974 and has, therefore, seen many financial crises over the decades, including the economic recession in the 1980s, the savings and loan crisis in 1990, the dot.com bust in 2001, and the Great Recession in 2008. Through all of those troubling times, the economy eventually rebounded and the commercial real estate market persevered. In fact, even when markets fluctuated, commercial real estate remained a desirable investment thanks to its long-term strategy.
As for LCP’s investment portfolio, due to our conservative approach and rigorous financial analysis, we have always served our partners and investors well throughout our 45 years as an investment manager. And we expect to continue to do the same during the Coronavirus pandemic and long after.
4. Strong Partnerships
Our company has forged countless partnerships and relationships throughout the years. One of the most notable is LCP’s direct equity interest in Lexington Realty Trust (“LXP”), a publicly traded office and industrial REIT. Today, the firm has an equity capitalization of $2.5 billion with a total enterprise value of $4.4 billion.
In 2006, LCP acquired a 25% interest in Crescent Hotels and Resorts, one of the largest third-party hotel management companies operating in the United States and Canada with more than 100 hotels under management. LCP sources opportunities and investment relationships by leveraging its expertise and affiliations with LXP and Crescent, targeting outsized returns for its investors.
Considering all of the factors above, LCP is confident enough to invest in our own EB-5 projects. In fact, we believe that our investors should feel as confident as we do. While the EB-5 program requires your investment to be at risk and does not allow guarantees of return, there are ways to mitigate risk and still achieve peace of mind. Our EB-5 investments come with a reassuring factor. We invest along with you as partners – the ultimate alignment of interest.
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