Results on $Lambda$ hyperon production are reported for collisions of p(3.5 GeV) + Nb, studied with the High Acceptance Di-Electron Spectrometer (HADES) at SIS18 at GSI Helmholtzzentrum for Heavy-Ion Research, Darmstadt. The transverse mass distributions in rapidity bins are well described by Boltzmann shapes with a maximum inverse slope parameter of about $90,$MeV at a rapidity of $y=1.0$, i.e. slightly below the center-of-mass rapidity for nucleon-nucleon collisions, $y_{cm}=1.12$. The rapidity density decreases monotonically with increasing rapidity within a rapidity window ranging from 0.3 to 1.3. The $Lambda$ phase-space distribution is compared with results of other experiments and with predictions of two transport approaches which are available publicly. None of the prese