Firm expects to buy $1.5 billion in assets with new fund

Having fully invested its first discretionary real estate fund in Washington, DC real estate, The Meridian Group has closed its second fund, Meridian Realty Partners II, L.P., with $231.6 million raised from institutional investors.

Meridian also raised and invested an additional $80 million of co-investment capital in Fund II transactions to date. With leverage and additional co-investment capital, the firm expects to acquire properties totaling approximately $1.5 billion for its new fund over the next several years.

Meridian’s first fund, Meridian Realty Partners I, L.P. raised $160 million of discretionary funds, along with additional co-investment capital of $510 million, for a total of $670 million for acquisitions and development projects. Total capitalization is expected to be $1.8 billion.

“I am very proud of our management team, which has grown rapidly and done an incredible job of raising and investing capital in the DC market,” said David Cheek, President of Meridian. “These deals fit our value-add investment strategy very well, and we continue to be bullish on the DC real estate market. We’ve been investing in this region for the past 24 years, and we look forward to investing here for many more years to come.”

Meridian has been an active buyer in the DC market. The firm, which invests exclusively in the metropolitan DC area, is now one of the largest fund operators in Washington.

Total capitalization for acquisitions and development is over $2.5 billion during the past six years. Meridian has raised approximately $1.0 billion of total equity capital through its first two funds.

“We are very pleased with what we have accomplished with our funds,” said Gary Block, Chief Investment Officer of Meridian. “Our proven track record, investment strategy and capabilities, along with the long-term strength of the Washington real estate market, attracted our institutional investors. We appreciate their confidence in us.”

Bruce Lane, Executive Vice President and Managing Director of Meridian, said the firm will continue to pursue its successful investment strategy with the new fund.

“Our investment strategy is focused on well-located, institutional-quality assets near Metro stations, major highways, and walkable amenities in submarkets such as Washington, DC; Tysons, Arlington, Alexandria and Reston, Va.; and Bethesda and Rockville, Md.,” Lane said. “These are places where we can create value through repositioning, renovations, leasing, redevelopment, development and land entitlements.”

Meridian has already completed five Fund II transactions totaling over $400 million:

- International Place, a 12-story office building at 1735 Lynn Street in the fast-evolving center of Rosslyn, Va. The Meridian Group is renovating and repositioning the 293,539-square-foot building.

- 1400 L Street, a 12-story Class A office building at the corner of L and 14th streets in Washington, DC. The firm is working on a major renovation to the 172,453-square-foot building, located less than two blocks from the McPherson Square Metro station.

- 11111 Sunset Hills Road, a Class A office building in Reston, Va. The 216,000-square-foot building is located near the Dulles Toll Road and the Wiehle-Reston East Metro station.

- The Hyatt Regency Bethesda, a 390-room upscale hotel located at 7400 Wisconsin Avenue. The firm is repositioning the well-known hotel, which sits atop the Bethesda Metro station.

- 1901 L Street, an 8-story 132,000-square-foot building at the corner of 19th and L streets in Washington, DC. Meridian is planning a major renovation to the building, including adding three floors.

Meridian’s Fund I is developing one of the largest projects in the DC area: The Boro, a 3.5-million-square-foot development located within steps of the Greensboro Metro station on the new Silver line. The Boro will feature a vibrant mix of office, residential, entertainment and retail, including a flagship Whole Foods Market, the largest in the region; and Showplace Icon, a state-of-the-art cinema.

In September, Meridian broke ground on The Boro’s Phase One, an $850 million project that will feature 1.7 million square feet of space. When complete, The Boro will consist of more than 1,500 residential units, 1.3 million square feet of office space, 400,000 square feet of retail space, and a new hotel.

Another Fund I investment includes 800 K and 801 Eye Street, two adjoined office buildings formerly called Techworld and now known as Anthem Row. The firm is planning a major $160 million renovation of the office complex in Washington’s East End.

ABOUT THE MERIDIAN GROUP

The Meridian Group is a real estate investment and development firm based in Bethesda, Md. Since its inception in 1993, Meridian has acquired and developed more than 14 million square feet of office, residential, hotel, mixed-use, and land with a focus on the metropolitan Washington, DC market. To learn more, visit Meridian’s website at www.tmgdc.com.