Washington DC real estate investor closes first fund

Federal Capital Partners’ $238m fund will help the firm expand its operations and increase its investments in the mid-Atlantic region of the US. The vehicle focuses on equity and debt investments in residential and commercial properties as well as land investments.

Federal Capital Partners, a real estate investment and operating company based in Washington, DC, has closed its first fund on $238 million.

FCP Fund I will be focused on equity and debt investments in residential and commercial properties and land in the mid-Atlantic region. Federal Capital said in a statement it expects to use modest leverage in the fund, and has established a line of credit funded by a consortium of banks led by JPMorgan. 

The firm, founded in 1999 by former Carlyle Group principals Esko Korhonen and Lacy Rice, owns and manages more than $1.2 billion worth of properties in the greater DC and Baltimore area, including in the multi-family, retail and office sector. It acquired three residential complexes in Maryland this year for $200 million. 

Korhonen said in a statement the company’s investment strategy in the past had consisted of acquiring undermanaged and undercapitalized assets in need of revamping. With the closing of its first fund, Federal Capital has more flexibility to work with existing owners and lenders in need of debt or joint venture capital, he added. 

Earlier this year the company sold off the Shirlington Gateway for $62.5 million, after acquiring the Alexandria, VA-based office complex for $55 million in 2006. It also brought on Alan Shearer, a former senior vice president for developer NVR, to establish its for-sale residential land acquisitions group.