Qatari Diar back Hines/Archstone DC development

The real estate arm of the Qatari Investment Authority is the anchor investor in the $700m CityCenterDC project, a 10-acre, mixed-use development in Washington DC.

Qatari Diar has become the anchor investor in Hines and Archstone’s $700 million redevelopment of Washington DC’s old convention centre area.

The real estate arm of the Qatari Investment Authority was named as the lead investor in the TFI US Real Estate Fund, a dedicated equity vehicle established to finance the project and managed by Barwa Bank’s investment banking subsidiary, The First Investor (TFI). TFI will also co-invest in the fund.

The deal marks Qatar’s first major US real estate investment, Mohammed Al Saad, vice chairman and managing director of Barwa Bank, said in a statement. “[The investment] will mark the beginning of a long and successful US/Qatari partnership in premium real estate investment and development.”

Mohammed Al Hedfa, group chief executive officer of Qatari Diar, added: “We are delighted to provide the anchor investment in the TFI US Real Estate Fund.”

Hines and Archstone are redeveloping Washington DC’s former convention centre area into a 10-acre, mixed-use project comprising 514,700-square-foot of office space, 325,000-square-foot of retail, 458 rental apartments and 216 condos. The two firms were selected as master plan developers in November 2003 but construction only started on 23 March, with completion expected by the end of 2013.

Some of the world’s largest institutional investors have increasingly targeted direct deals in major US cities, such as Washington DC. In October, the Canada Pension Plan Investment Board made its first major investment in the capital acquiring 45 percent stakes in two prime office properties owned by Vornado Realty Trust for $91 million.
The deal to buy minority interests in the Warner Building at 1299 Pennsylvania Avenue and 1101 17th Street NW came on the back of the pension buying a 45 percent interest in Manhattan’s McGraw Hill building from SL Green for roughly $576 million.

Hines founder and chairman Gerald Hines said: “It is both a great privilege and a great opportunity to be able to develop a parcel this large starting with a blank slate.” Richard Ellis and Tanween WLL are acting as real estate advisors to TFI.