Our Strategy
We find value where others don't.
Fairlawn Capital's core mission is to find value where others don't. This can mean a variety of different things over time, but we always tend to uncover the most value in overlooked places. Throughout our history, we have generated a track record of outsized risk-adjusted returns by approaching projects differently than anyone else. There is no "one size fits all" approach in our inventory; we treat every project as a new opportunity to uncover hidden value.
Investment Thesis
A superior strategy begins with a robust investment thesis. We believe that the current market landscape exhibits a variety of opportunities for Fairlawn Capital to capture excess value. To that end, our team approaches each opportunity with a keen sense of how (and where) market headwinds will drive asset performance.
LONG-TERM CAPITAL
- Focus on building sustainable value
- Look to partner with investors for the long-term
- Underwrite investments for a 10-year holding period
- Seek interim return of invested capital via recapitalizations
MACRO TRENDS FAVOR RENTAL HOUSING
- Homeownership rate slowing; ownership incentives declining
- Majority of population views renting as more cost-effective
- Household and consumer debt levels continue to rise
- Aging retirees looking to relocate from single-family home into condos, apartments and seniors housing
NON-PRIMARY MARKET FOCUS
- Major capital focus will likely remain on Tier 1 markets
- Some investors beginning to look at large secondary markets for higher yield
- Little investment in tertiary and sub-tertiary markets with strong underlying fundamentals or inherent stability
OPERATIONAL CORE COMPETENCY
- Fairlawn Real Estate manages over 5,000 apartment units and over 300,000 square feet of commercial space
- Operational platform built for rapid and sustainable growth
- Deep, hands-on experience helps to ensure maximum asset performance
AFFORDABLE HOUSING SUPPLY SHORTAGE
- New construction focus on Class A product
- Construction costs continually increasing
- Deteriorating condition of Class B/C product
- Large Tier 1 markets becoming less affordable
- Supply of middle-class housing becoming more scarce
UNDERVALUATION OF NEIGHBORHOOD RETAIL
- Technology will continue to change the retail environment, but service-oriented business will continue to use local space to engage customers
- Select retail properties with good location and strong demographics will outperform expectations over the next decade
Core Investment Types
In order to capitalize on our investment thesis, we have adopted a variety of implementation strategies. Our main project type is value-add multifamily, where we look to leverage our operational core competencies and improve both physical characteristics and financial performance. Overall, we have successfully operated a diverse portfolio of real estate assets ranging from core neighborhood retail centers to ground-up, mixed-use development projects.
Value-Add
- Mildly distressed properties
- Strong, desirable locations
- Poor existing management and/or deteriorating conditions
- Significant initial and ongoing capital budgets
Opportunistic
- Highly distressed assets
- Low occupancy
- Full management turnaround
- Heavy initial and ongoing capital budgets
- Near-term recapitalization opportunity
Development
- Opportunistic development opportunities
- Ground-up new or redevelopment
- Multifamily, retail or mixed-use
- Luxury product at a value price
- Look to fill a void in product offerings