Greater Washington developers have raised tens of millions of dollars in private equity money this year to help fund construction of large projects inside the region and beyond.
Carr Properties’ investment vehicle, Carr Properties Partnership L.P., reported it has raised $105.6 million from 16 investors in 2022, bringing the total amount raised to $792.4 million since the fund was launched in 2016, according to filings with the Securities and Exchange Commission. Another of its private equity funds, Carr Properties Holdings L.P., has raised $60.3 million from 12 investors, bringing that fund’s total to $692.3 million since 2016, filings show.
The D.C.-based company did not respond to a request for comment, but it’s raising the funds as it prepares to break ground on a number of projects, including its first major development in Austin, Texas: a 43-story, 738,000-square-foot office tower. Carr has also filed plans for a major mixed-use development in Alexandria’s Old Town, though hasn’t discussed a timeline.
The company is one of several commercial real estate developers raising money for current or future projects, Form D filings from the SEC show. Just a few weeks ago, Hoffman & Associates closed on a $65 million fund that it says will allow it to quickly seize opportunities while much of its capital is tied up in big projects.
Meanwhile, D.C.-based Redbrick LMD has begun raising money through its Redbrick Opportunity Fund IV LLC. Its filings do not indicate a planned ceiling on investment. Redbrock just began construction on the Bridge District, its long-planned 2.5 million-square-foot development along the 600 and 700 blocks of Howard Road SE. It didn’t respond to a request for comment.
The Meridian Group in Bethesda has filed a Form D indicating it has raised $67 million from an investor for its Meridian Realty Partners Special Opportunities II L.P. fund. Mark King, president and COO of the company, said Meridian has been diversifying its investments to include industrial and logistics properties, which have seen strong returns in recent years.
Meridian has periodically raised funds through private equity vehicles over the past decade. It closed $160 million fund in 2013, a $231.6 million fund in 2017, a $143.6 million fund in 2019 and launched a fourth in 2020 with a goal of raising $200 million, SEC filings show.
Analyzing the private equity market this year, Morgan Stanley found that investment in real estate has cooled somewhat as investors weigh the impact of inflation and the effect of changing working patterns on the values of office properties. But King says he believes the lull is temporary, particularly with industrial, logistics and self-storage properties generating almost triple the returns of other properties like offices and hotels.
“I think it’s temporary, [that] a number of institutional investors are on the sidelines a little bit,” King said. “But, we are seeing pockets of money, and many of them are using the opportunity to get into the market.”
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