Almanac Realty Investors is doubling down on the Mid-Atlantic region in its latest, and largest, investment: up to $400 million for Merritt Properties, according to a statement on Monday.
The New York-based private equity real estate firm began investing in the Baltimore- and Ashburn, Virginia-based company in 1997 with a $75 million commitment. Since then, Almanac has invested a total of $150 million prior to its latest deal.
Merritt plans to use the capital to expand its portfolio by 20-30 percent, focusing on industrial properties in the Baltimore-Washington, DC corridor, according to the statement. The firm owns about 16 million square feet of real estate, including industrial, office, data centers and retail. Its portfolio is about 94 percent occupied.
Capital for the investment came from Almanac Realty Securities VII, a value-added vehicle that closed in 2015 on $1.4 billion, a source with knowledge of the deal said. Fund VII’s other investments include a $300 million investment to PECO Real Estate Partners, a retail-focused company in June, and a $337.5 million investment to Westcore Properties in November 2016, PERE previously reported.
Almanac invests growth capital in property companies that are active in the ownership, management and enhancement of real estate in the US. Fund investments typically are structured as convertible debt or preferred equity. The firm targets a net annual return of 12 percent or more and net investment multiple of 1.5x to 1.75x on its investments.
Fund VII generated an 11.9 percent net internal rate of return as of September 30. The firm’s entire fund series returned 12.9 percent net as of June 30, according to the Pennsylvania Public School Employees’ Retirement System, which committed $100 million to Fund VII.
Founded in 1981 as Rothschild Realty, Almanac has committed over $4.8 billion to 39 companies.