Our Investment Strategy

In private real estate, long-term performance is rarely the result of market timing alone. It is driven by disciplined underwriting, operational execution, and the ability to create value through direct control of assets over time.

‍

At Lightstone DIRECT, our investment strategy is intentionally simple, repeatable, and execution-focused. Rather than relying on market appreciation, we emphasize value creation through active asset management and hands-on operational improvement. This framework has guided Lightstone’s investment approach for decades and is applied consistently across our portfolio.

‍

A Disciplined, Lifecycle-Based Approach

Our strategy is applied across the full investment lifecycle — from acquisition through execution to exit — with a focus on controllable drivers of performance:

‍

• Acquisition
• Improvement
• Exit/disposition

‍

‍

Acquire: Targeting Assets with Clear Paths to Value

We focus on acquiring well-located assets at attractive bases with identifiable opportunities for improvement. These opportunities often involve complexity, operational friction, or transitional ownership structures that limit broad competition.

‍

As a vertically integrated owner-operator with proprietary capital, Lightstone is able to act decisively when opportunities arise. We source and underwrite investments internally, allowing us to evaluate risk, pricing, and execution with precision — and often fund transactions upfront before inviting outside investors to participate.

‍

Improve: Active Management and Operational Execution

Following acquisition, we take a hands-on approach to both asset-level operations and capital structure management. This phase is where the majority of value is created. Given the current landscape of input costs, capital markets conditions, and Lightstone’s general focus on cashflow, we typically pursue a “light value-add” strategy, by which cap ex is controlled, and occupancy is strong at acquisition.

‍

Our teams focus on improving performance through:

‍

• Addressing operational inefficiencies
  
• Optimizing leasing strategies and expense structures
  
• Implementing targeted capital improvements
  
• Actively managing assets based on real-time portfolio data

‍

Because Lightstone owns and operates a large, national portfolio, we benefit from direct insight into operating trends, tenant behavior, and cost structures across markets. This “inside-the-portfolio” perspective allows us to make informed decisions that enhance cash flow and net operating income.

‍

Exit: Institutional-Quality Outcomes

Our objective is to transform underperforming or transitional assets into stabilized, institutional-quality real estate. When asset fundamentals and market conditions align, we seek liquidity through sales to institutional or strategic buyers.

‍

Exit timing is driven by fundamentals, not arbitrary hold periods. By focusing on execution during the hold, we aim to create assets that are attractive to long-term capital and positioned for durable performance. Because Lightstone is privately held, and operating on a deal-by-deal basis, we practice full autonomy in terms of exit timing. This means that we can pursue optimal moments for exit, rather than answering to co-GPs or the constraints of a fund mandate.

‍

Alignment Through Lightstone DIRECT

Lightstone DIRECT was created to give investors direct access to this strategy on a deal-by-deal basis. Lightstone invests meaningful capital alongside its investors, typically committing 20% or more of the equity in each opportunity, and often funding investments upfront before opening them to partners.

‍

Our approach is designed to align incentives, maintain transparency, and give investors confidence that capital is deployed alongside ours — under the same structures and economics.

‍

In Abernathy Industrial Park, this strategy is being applied in practice.
If you’d like to learn more about how we source, underwrite, and manage investments at Lightstone DIRECT, we welcome the opportunity to connect.

‍