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 3,600 apartment units and over 200,000 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

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