ASB Real Estate Investments has closed its second value-added fund on $171 million, the Washington, DC-based firm said Wednesday.
ASB launched Meridian Fund II in the third quarter of 2014 with a target size ranging from $150 million to $250 million and held a first close in August 2015. The firm invests across property types in major urban US markets, targeting a gross internal rate of return of 12 percent to 14 percent. ASB’s first purchase from Fund II was the June acquisition of a mixed-use building in Manhattan’s Union Square neighborhood for $25 million, in partnership with Chicago-based real estate investment firm L3 Capital, according to an announcement at the time.
The firm closed its first value-added fund in 2010 on $113 million. Meridian Fund I's net IRR was 21.8 percent.
“One of the biggest differences between the first and second funds is that we don’t see any distressed real estate opportunities like we saw coming out of the last downturn,” Jim Darcey, the fund’s portfolio manager, told PERE. “That requires us to be even pickier than we normally are.”
Meridian’s other investment vehicles include a $5 billion open-ended core fund and a $270 million separate account.
ASB is investing up to $16 million in the fund. The firm managed $6.8 billion in assets as of June 30.