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CBRE GIP, JBG form $250m US joint venture

The partnership also has made its first investment with the acquisition of a Washington DC office building. 

CBRE Global Investment Partners (GIP), the indirect real estate arm of Los Angeles-based CBRE Global Investors, and The JBG Companies, a Chevy Chase, Maryland-based real estate investment firm, have created a programmatic joint venture focused on buying commercial real estate assets in the Washington, DC metropolitan area. The partnership initially plans to deploy approximately $250 million of equity to purchase $500 million of office, retail and multifamily properties, with the potential for further expansion.

The joint venture will invest on behalf of a club of CBRE GIP investors and JBG’s ninth opportunistic real estate fund, JBG Investment Fund IX, which has more than $650 million in capital commitments. The two firms jointly will pursue investments with a core-plus investments, transactions that will allow for income growth and value creation through lease-up and light repositioning to ultimately create a core stabilized property.

The partnership also has struck its first deal, with the purchase of The Foundry, a 232,000-square-foot office building located at 1055 Thomas Jefferson Street in the Georgetown submarket of Washington, DC, from Cornerstone Real Estate Advisers. The purchase price was undisclosed, but according to the DC Office of Tax and Revenue, the property traded for $79.5 million. JBG is planning an extensive renovation of the property, which was built in 1975. Cornerstone had purchased the property in 2002 for $51 million.

“This venture is a great fit with our strategy of investing with best-in-class operating partners,” said Paul Sisson, head of the Americas for CBRE GIP, in a statement. “The JBG Companies has deep local relationships, market knowledge and operating expertise and this venture provides our clients an opportunity to acquire high-quality assets in one of the largest US metros, which offers a diverse and resilient economy with strong demographics.”

CBRE GIP is an independent division of CBRE Global Investors, the real estate investment firm that itself is a subsidiary of commercial real estate services company CBRE Group. GIP invests in private funds, secondaries, co-investments and joint ventures, partnering with operators and fund managers for each strategy. The business had $12.5 billion in assets under management (AUM) as of September 30. JBG, which develops, owns and manages office, residential, hotel and retail properties, has more than $10 billion in AUM and development in the Washington, DC area.