The Denison LMWI Property Trust 1 sought to raise $14.8 million for the purchase of an office building at 165 Walker Street in North Sydney.
"While the trust received very strong in-principle support from investors and advisers, full commitment to the trust was not reached," Denison LMWI chief executive Matthew Burrows said.
"Therefore, we decided to withdraw from the purchase in the interests of our investors."
The joint venture was planning to launch two to three syndicates a year, but will now have to revise its strategy.
"We will have to talk with advisers about creating more efficiency in the capital raising area," LMW Invest funds management executive director Michael Este said.
"We've got a bit of work to do, but we're still committed to the joint venture."
