Apex Capital Investments thriving in mid-tier Shariah property deals

For nearly two decades, Philadelphia-based Apex Capital Investments has steadily built a reputation as one of the few US mid-tier real estate managers able to consistently structure and execute Shariah compliant investment deals for Middle East clientele.  

The firm has carved out a deliberate niche – multi-family residential properties and single-tenant commercial buildings with long leases – a strategy, described by CEO John Gaghan, which was shaped by years of working with Gulf institutional investors, family offices and regional banks navigating the complexities of US real estate purchases. 

These sectors have proven resilient across cycles, offering both income visibility and defensive characteristics. “Right now, our portfolio is roughly 50% multi-family and 50% office and industrial assets. These provide both leasehold income streams and capital appreciation.” 

Apex Capital had looked at other real estate sectors previously – including senior homes with its first purchase back in 2004 on behalf of inaugural client Kuwait Finance House US – but John said operational challenges made the firm opt out of this category. 

Multi-tenanted office buildings and retail options like malls are also excluded, due to the business operations mix in such premises which may be incompatible with Shariah principles – like lending institutions, insurance agencies and Haram aspects like alcohol, pork or gambling sales. 

“We sit in the middle of the market. Large US institutional managers are simply too big to customize their structures for Shariah investors, while smaller developers don’t have the capacity to understand or execute Shariah requirements. We fill that gap.” 

Its recent transactions reflect that positioning. Apex Capital is closing on a US$35 million pharmaceutical manufacturing facility with a 20-year lease, while another multi-family acquisition valued at US$46 million is underway.  

These deals fall within what John said is attractive for its pool of investors looking to invest in the US market: “The sweet spot right now is US$35 - 100 million. Islamic financing is available at that level and investors feel confident putting that kind of capital to work.” 

Apex Capital’s longstanding experience in Shariah compliance deals has become a competitive advantage. The firm typically employs two structures – Ijarah and offshore Murabahah, often domiciled in Cayman – with transaction support from specialist firms in the Gulf. 

“Ijarah is the most conservative option. But some US lenders still aren’t comfortable with it. When that happens, we structure it as Murabahah offshore, then document a conventional loan in the US. It keeps the investor fully compliant while allowing the deal to proceed in a familiar framework.” 

To ensure Shariah compliance costs – with extra legal and advisory expenses – John said standalone assets below US$20 million are rarely feasible deals. Portfolio structures, however, offer efficiency; the firm is preparing one such mandate involving five acquisitions of US$25 million each consolidated under a single Cayman setup. 

Unlike large asset managers who operate fixed strategies and rigid structures, Apex positions itself as a bespoke adviser. In some cases, the firm co-invests and holds assets on its own balance sheet; in others, it operates purely as an adviser, as in a recent mandate with a Qatari high-net-worth family acquiring a US office building. 

“We can do anything from direct ownership to pure advisory,” John notes. “Some clients want 100% ownership, and we support them from acquisition through asset management and US accounting.” 

This flexibility has helped Apex build deep relationships with Gulf clients over the years. While earlier clients such as KFH no longer feature in its active mandates, Apex Capital continues to work with the team members – a reflection of the relationship-driven nature of this business. 

On why the firm continues to focus on only Shariah deals, John said: “We’ve done this for so long that we’re very comfortable navigating the challenges. Our role is to give investors access to good institutional real estate while accommodating the structures they need.”