What We Offer: Real Estate Investments
Historically, Lesha Bank has invested its own capital in certain acquisitions of real assets across many geographies. In 2017, responding to market demand, Lesha Bank revamped its business model from an asset-based business model to a fee-income based model.
Lesha Bank focused primarily on implementing a direct core/core-plus real-estate strategy in the US, moving towards the acquisition of direct real estate assets on the Bank’s balance sheet. Once acquired, certain assets were offered to stakeholders as co-investment opportunities, alongside Lesha Bank, on a deal-by-deal basis.
Each acquisition aimed to generate consistent cash yield over its investment horizon as well as a capital appreciation on exit.
While Lesha Bank’s strategy has been sub-sector agnostic, the real-estate deals closed have been primarily in single & muti-tenant offices (with long and acceptable weighted average lease terms (WALT) and rental escalations) and multifamily units (with high occupancies and potential for rental uplift).
As Lesha Bank gains traction in its typical $50-150M direct deals and evolves over time, it is targeting to include other real-estate strategies based on macroeconomic conditions and market cycles, such as:
Office Buildings: Trophy or Class A assets leased to a single tenant, on a NNN or Absolute Net basis.
Light value-add or core + multi-tenant offices
Multi-family Residentials: Core or value-add Class A and B assets
Industrial Assets: Warehouses, factories, last mile delivery terminals, etc.
While Lesha Bank has traditionally shown a preference for assets located in the US Sun Belt which has periodically shown positive demographics (net positive migration), job creation and tax-friendly and landlord-friendly jurisdictions, it remains open to other geographies and jurisdictions with economic merits.
Tax Efficient & Shari'a-complaint
Lesha Bank works relentlessly to ensure that all its investments are Shari’a-compliant. Furthermore, the team works diligently with its partners, Shari’a board, tax and legal advisors to structure deals in a tax-efficient manner.
Type of Office Leases
As the program aims to offer stable cash flows to its clients, the Bank favors single tenant and multi-tenant office buildings leased on a long-term NNN or Absolute Net basis. Under such lease terms, tenants are responsible for property maintenance, tax payment, building insurance, and repairs. The landlord (which is occasionally Lesha Bank and/or its clients) will only be responsible for handling structural repairs.
By primarily looking for unbreakable, untransferable and unencumbered leases with more than 10 years remaining, Lesha Bank’s investments aim to mitigate the re-leasing risk associated with expiry of lease terms and stable distributions to its investors with potential upside upon exit.