Washington, DC — Principals of Rock Creek Property Group announced that they have successfully closed on their second real estate fund, in which they raised $60 million. Fund II will acquire office, retail, multi-family and industrial properties throughout the Greater Washington, DC region.
As with Rock Creek’s Fund I, launched in 2010, Fund II will continue to invest primarily in the $3 million to $30 million “middle-market” space, targeting development projects, value-added opportunities and strategic joint ventures. In addition, Fund II will look to acquire well-located, income-producing assets which have the potential for long-term appreciation.
“Not every property will be developed or acquired with a goal to exit in the short term,” said Rock Creek principals Gary Schlager and Andy Glick. “Lessons learned from Fund I, and our current deal flow both support the premise that certain assets should be held longer term. As the investment climate and our platform continue to evolve, we determined that it is more beneficial to our investors to mix development and opportunistic plays within the same investment vehicle as income-producing assets.”
Rock Creek will continue to focus on the DC region, where its four principals each have more than 25 years of experience. “We have been involved in many real estate cycles over the years and developed a unique niche,” Schlager said. “We have experience across all major product types, which allows us to both avoid tunnel-vision investing and to hone in on the highest and best use for each asset, sometimes in less obvious ways.”
This investment strategy has served Rock Creek well over the past few years, with its redevelopment of office buildings at 1100 16th St., NW, and 1438 U St., NW, along with the joint-venture development of multi-family assets including Takoma Flats, an 88-unit gut renovation in DC, and The Shelby, a 240-unit, class A ground-up development in Alexandria.
Rock Creek’s Fund II is already off to a successful start, having acquired three projects, including the joint-venture acquisition of 646-654 H St., NE, in Washington’s emerging H Street Corridor. This property is located on a prime corner next to a Whole Foods that is under construction, and where Rock Creek will develop a mixed-use project. Rock Creek’s Fund II has also acquired two turn-around office/retail plays at 1413-15 22nd St., NW, in Dupont Circle, and 6833 4th St., NW, two blocks from the Takoma Metro station.
Rock Creek anticipates that a portion of its deal flow in Fund II may be strategic joint ventures with other operators. Glick emphasized that “Rock Creek provides much more than just capital. We make projects better and more profitable for our partners by filling in the gaps where needed, providing a full platform of development and investment services to help maximize value on each investment.”