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Capital Raising Round-Up: Moinian Launches CRE Lending Business in NYC; Lionstone, Meridian Close Latest Funds

Lionstone, Meridian Focusing on Value-Add Investments
February 16, 2017
New York City-based developer The Moinian Group has launched Moinian Capital Partners, a new lending division that will provide commercial real estate loans starting at $25 million.

Moinian said the new lending arm will seek to finance large institutional assets within the hotel, office, retail, land and residential sectors, initially focusing on the firm’s active markets, offering various CRE debt options including senior mortgages, mezzanine loans, preferred equity and construction loans. Jonathan Chassin is heading the venture as managing director. Most recently, Chassin was an executive with Morgan Stanley’s Principal Transactions Group.

"We have tremendous relationships and standing throughout the market and continue to see the need and opportunity for strong, stable, private lenders," said Joseph Moinian, CEO of The Moinian Group in a statement announcing the entity. "We are perfectly positioned to provide financing."

One of New York City’s most active developers, Moinian is currently in development of 3 Hudson Blvd., a 66-story, 2 million-square-foot tower in the Hudson Yards District. It also recently began construction on a new residential building at 572 11th Ave. and opened Sky, a 71-story, 1,175-unit residential tower at 42nd St. and 11th Ave. The developer is also planning a luxury residential building at 220 11th Ave.

Lionstone Investments Raises $450 Million for Value-Add Fund

Houston-based private equity investment firm Lionstone Investments held final close for its its Lionstone U.S. Value-Add Four fund (LVA-Four). The firm raised $450 million.

The fund will target office, retail, and mixed-use real estate in need of capital to fund improvements needed to boost occupancy and income, said Bryan Sanchez, Lionstone’s chief investment officer.

LVA-Four has acquired three properties to date. Most recently it purchased 110 Atrium, an office building in Bellevue, WA at 110 110th Ave. NE it acquired last November for $81.5 million (about $335/square foot).

Lionstone’s value-add program was launched in 2005. It has invested in more than $4 billion of value-add properties on behalf of university endowments, foundations, family offices, and large public and corporate pension plans.

Meridian Group Raises $300 Million for DC Real Estate

The Meridian Group closed its second fund, Meridian Realty Partners II 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.

Bruce Lane, executive vice president and managing director of Meridian, said the firm will continue to target institutional-quality assets near subway stations, major highways, and walkable amenities in the capital and submarkets such as Tysons, Arlington, Alexandria and Reston, VA; and Bethesda and Rockville, MD.

"These are places where we can create value through repositioning, renovations, leasing, redevelopment, development and land entitlements,” Lane said.

Meridian completed three purchases in the past year for Fund II totaling over $250 million:
  • 1901 L St. NW in Washington, DC, an eight-story 132,000-square-foot building bought last month for $75 million (about $567/square foot) where Meridian is planning to add three floors as part of a major renovation.
  • International Place, a 12-story office building at 1735 Lynn St. in Arlington, VA, bought in June 2016 for $106.5 million (about $363/square foot). It is currently renovating and repositioning the 293,539-square-foot building.
  • 1400 L S. NW, a 12-story office building bought in May 2016 for $70 million (about $403/square foot). The 172,453-square-foot building is currently undergoing renovations.

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