David Boyle, the former chief investment officer at Morgan Stanley’s Alternative Investment Partners Real Estate, and Brad Beanblossom, one of Sam Zell’s protégés at Equity International, have inked their new firm’s first venture, PERE has learned.
The pair left their roles at Morgan Stanley and EI last summer to launch Chicago and London-based real estate investment advisory firm NW1 Partners, which focuses on value-add investments in the US, the UK and continental Europe. The firm is backed by UK private equity real estate firm Delancey.
For its first investment, NW1 formed a partnership to buy $175 million of urban retail assets in Washington, DC. Urban retail manager Martin-Diamond Properties is the venture’s operating partner. While this is the first time NW1 and Martin-Diamond have partnered on a deal, Boyle invested with one of the latter firm’s executives 16 years ago in a previous role.
Through NW1 Washington DC Urban Retail Venture, the firms are assembling a portfolio of assets on a deal-by-deal basis. The partners started buying assets at the end of 2017 and will continue acquiring through early 2019, with plans to build a portfolio of about 20 properties. The venture is about one-third of the way to its goal, with over 70,000 square feet currently under management.
Boyle told PERE the venture is betting on strong fundamentals in the US capital.
“There’s really limited supply in DC compared to most other markets, and it’s a very supply-constrained market going forward,” he said. “On the demand side, there’s been a big step change with millennials moving back into the district in a big way. DC has become one of the wealthiest and most educated metropolitan statistical areas in the US. We think that’s a powerful combination.”
One recently-closed asset is 1351 Wisconsin Avenue, NW in Georgetown. The property is the original Georgetown Theater, which includes the right to keep the original Georgetown neon sign, that was restored over recent years to a retail-led, mixed-use asset. NW1’s business plan is to lease up the vacant 6,500 square feet of retail space.
Next, the firm plans to close its first UK venture, which focuses on last-mile logistics around London, in the coming two months, Boyle said.
NW1 plans to invest across all property types, with a focus on “small-cap, consumer-driven strategies” found in sectors such as urban retail, last-mile logistics, parking and self-storage, Boyle previously told PERE. The partners have said that this approach would not only help them acquire assets in fragmented, less competitive markets, but would also provide opportunities for a portfolio “roll-up” and institutional exit.
Boyle declined to name the investors in the Washington DC venture.
Delancey founder and chief executive Jamie Ritblat and managing director Paul Goswell sit on NW1’s board of directors and its investment committee, though in non-executive roles.
Prior to forming NW1, Boyle was managing director and chief investment officer of the AIP Real Estate team at Morgan Stanley, where he was responsible for investment strategy across Europe, Asia and the Americas.
Beanblossom spent 15 years with Sam Zell’s Equity International. In his last role at EI, Beanblossom oversaw the firm’s investments team as senior vice-president and served on EI’s investment committee.