A new real estate investment fund targeting development projects in the Washington-Baltimore region has initially raised $35 million from institutional investors. Sponsored by Regional Real Estate Investment Corporation (RREIC) of Plymouth Meeting, PA and New York City-based Real Estate Capital Partners (RECP), Develop-DC, L.P. will provide equity or mezzanine loans to leading local and national developers for new ground-up development or projects requiring major renovations. All construction will utilize 100 percent union labor.
The Fund’s investors include the International Brotherhood of Electrical Workers Local 26, the largest labor union in Washington, DC; the International Union of Bricklayers and Allied Craftworkers; and Independence Blue Cross of Pennsylvania, among others, along with investments from the sponsors, RREIC and RECP.
Develop-DC is targeting projects valued at $30-150 million covering a wide range of sectors including multifamily residential, office, hospitality, and mixed-use. The initial focus will be multifamily projects, particularly those connected to transportation hubs. Over the next three to four years, the fund expects to invest up to $200 million in projects with a total valuation of $500-$700 million.
David Reiner, Director of RREIC, said: “The Develop-DC Fund is a true partnership among Taft Hartley and non-Taft Hartley institutional investors, the development community, union labor, and the construction industry with the goal of financing, developing, and building high-quality and profitable projects in the Washington-Baltimore area.”
“We are pleased with the support that we have received from our investors, their consultants and the cooperation that we have received from all of the various parties that are involved in this initiative,” remarked Joe Barilotti, Vice President of RREIC.
“The Washington, DC area market is viewed by many as the best commercial real estate market in the US and one of the most stable in the world, with excellent investment prospects,” said Karin Shewer, Founding Partner and President of RECP.
Michael Fruchtman, Director – Commercial Investment for RECP and the fund, added: “Develop-DC is bringing a fresh capital source to the full array of Washington/Baltimore developments projects. We have put together a team with extensive experience in originating, structuring, underwriting, and managing major development investments utilizing union labor and look forward to expanding our relationships with the region’s development community.”
About the Sponsors:
RREIC is the founder and sponsor of the Delaware Valley Real Estate Investment Fund, created for Taft Hartley retirement plans and other qualified investors. Over the past 12 years, RREIC has invested in 20 ground-up and repositioning projects, all of which were constructed with 100 percent union labor. RREIC estimates that its investments have facilitated the creation of more than 2.5 million union man-hours of labor for building and construction trades unions in the greater Philadelphia area.
Founded in 1989, RECP has invested over $9 billion in US real estate and currently manages a real estate portfolio of over $6 billion on behalf of institutional investors and high net-worth families. RECAP has sponsored 23 real estate investment funds during its 23 years of operation.
Develop-DC intends to bring the same model to the Washington-Baltimore corridor, providing its investors with competitive returns and the secondary benefits associated with union job creation.