Meridian Closes New Real Estate Fund with $160M in DC Real Estate

By Lynn Armitage, Contributing Editor

The Meridian Group has proven that even in an uncertain economy, a lot of money can still be made in commercial real estate.

The Bethesda-based real estate investment and development firm has just closed the deal on its first real estate private equity fund, acquiring more than $160 million of discretionary capital from investors that could be leveraged to buy more than $500 million worth of property in the Washington, D.C., metropolitan area.

“We are very proud to have completed one of the few first discretionary real estate funds raised in the U.S. since the financial crisis in 2008,” said Gary Block, Meridian’s managing director, who appreciates investor confidence in the 20-year-old investment firm.

Meridian has wasted no time in spending capital from its new fund, buying up more than half a million square feet of office space in Northern Virginia, including the 280,000-square-foot Tysons Technology Center in Tysons Corner.

“We are delighted to have this discretionary fund that enables us to capitalize on the attractive investment opportunities that we are seeing in our market as a result of the slow economy, soft market conditions and low interest rates,” said David Cheek, president of Meridian. “We believe that it is a good time in the cycle to selectively invest in Washington real estate, and we expect to achieve our targeted returns as the market improves over the next several years and beyond.”

Since first opening its doors in 1993, Meridian has acquired 7.4 million square feet of office, industrial retail and hotel properties, such as an LA Fitness Health Club and National Gateway I and II, as well as 439 acres of land, for a total portfolio value of $2.5 billion.

“We have achieved excellent investment returns by doing all of this over a 20-year period and through five economic cycles now,” said Bruce Lane, executive vice president and managing director of Meridian. “And we look forward to continuing this success with our new fund.”

This past September, the company sold its flagship asset, 3 Bethesda Metro Center, a 365,000-square-foot office building above the Bethesda Metro, to Brookfield Properties for $150 million.

The Meridian Group was founded by David Cheek and Bruce Lane in 1993, with its primary focus on real estate investment and development in the metropolitan Washington, D.C., area. The benchmark of the company is to invest on behalf of institutional capital partners, such as premier insurance companies and real estate private equity funds. The company formed Meridian Realty Partners I, a discretionary investment fund focused on value-added investment opportunities across all asset types and capital structures.

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