"Despite softening in some areas of the real estate market in Kentucky as well as many other parts of the country, Byron Holley has good news: investment in large-scale real estate developments is thriving.
As chairman and CEO of Lexington Capital, he has overseen a doubling in the size of his company, both in number of partners and the number of successful real estate investment ventures during the past year.
"We've taken quantum leaps," Holley said of the company, formed in 2005. "Our projects have continued to grow in scale, and we are experiencing exponential growth. We are very optimistic about the future."
Lexington Capital, a real estate venture capital group, has garnered success in "cherry-picking" opportunities in real estate as well as pursuing other types of investment opportunities, he said.
The company specializes in real estate syndication, allowing individual investors to pool resources to invest directly in large-scale real estate developments. In order to qualify as an accredited investor, an individual must have a net worth of $1 million, or annual income of $200,000. About 20 percent of the individual investors are Kentucky-based, Holley said. The rest are comprised of both national and international investors.
During the past year, the company saw growing investor interest from Europe and Asia, primarily from Germany and China. "With a decline in the U.S. dollar, we are seeing great international interest in U.S. real estate development," Holley said. "While there are more European and Asian players, we are also seeing more individuals in the United States looking at real estate as an important investment in addition to more traditional stocks and bonds."
To accommodate this growing interest, Lexington Capital maintains offices in Atlanta and Naples, as well as Lexington. The company also has two associated offices, one in Seattle and the other in Boston.
The company's heart, however, belongs to Kentucky. The company served as consultant for the $88 million Shelburne Plaza project in Lexington as well as the Jessamine County Jack Nicklaus Signature Golf Course and residential development, which projected gross sales in excess of $100 million.
Other investment opportunities have taken the company further afield during the past year. Among the developments are the Palazzo de Lago in Orlando, the largest InterContinental Resort in the world; the Sugarloaf Hotel in Atlanta; Townpark Hotel, an Embassy Suites in the Atlanta area; and the Sports Casino in Las Vegas.
While he is enthusiastic about all the developments, The Sports Casino in Las Vegas particularly excites Holley. Marketing materials describe the project as the "only place in the world where visitors will be able to watch sports, play sports, buy sports products and test the newest, state-of-the-art sports equipment from around the world."
"It was Byron's approach that closed me," said Matt Rose, CEO of Ultimate Sports and the developer of The Sports Casino. "I believe in his character; he is so kind, so honest, and yet, so direct."
The site for the Sports Casino will include 116 acres, purchased at a price of $850,000 per acre, Rose said. The complex includes 5,152 hotel rooms, 500 luxury condos and 10 separate sports venues. With an expected attendance of 10 million people per year, the cost of the Casino is estimated at $5.6 billion. Groundbreaking is expected within the next 12 months, Rose said.
Holley wants to bring his experience from this development back to Kentucky. A platform of Governor Steve Beshear's successful political campaign was to give the public the opportunity to vote on amending the constitution to permit expanded gaming, and Holley believes that it could be a major area of growth and investment for the commonwealth.
"We have a strong understanding of the process necessary to get a casino up and started," Holley said. "We feel there are enormous opportunities for Kentucky."
The 1987 UK graduate has also pursued other opportunities in 2007 in addition to real estate for the investment company he founded after a career with several distinguished brokerage firms.
Earlier this month, Lexington Capital planned a seminar presentation about investment in TRT (Tissue Regeneration Technologies), a company that researches and develops technology for treatment of wounds and burns. The company's medical devices have been used for the treatment of American soldiers wounded in Iraq, among others. While the company is based in Georgia, Lexington Capital hoped to encourage local interest in the company. Instead, the planned presentation was cancelled the night before when Lexington Capital secured a Cincinnati firm to underwrite the funding entirely.
In another interesting project, Lexington Capital helped secure funding for The American Fight League. Based in Lexington, the league needed additional funding in order to expand its market nationally. This includes presenting mixed martial arts fights in national venues and special touring shows, according to a spokesperson.
The League chose to work with Lexington Capital rather than a Wall Street firm due to its proven track record and professionalism, the spokesperson said.
The American Fight League is part of the fastest growing sport in America, second only to the NFL. Last year the League's fights were featured on HD Net, owned by Mark Cuban. Cuban was the co-founder of Broadcast.com and currently owns the Dallas Mavericks. With expanded funding raised by Lexington Capital, the league plans for expanded broadcast as well as other opportunities in 2008.
In the coming year, Holley expects Lexington Capital to double in growth again, both in the number of associates as well as projects. "We are a small boutique equity firm," he said, "but our product is large scale."
"Through a lot of hard work, we've gained the confidence of both large and small investors," he said. "Providing creative value to them has proven to be successful."