Klein Enterprises Locks in $200M From Almanac Realty for East Coast Expansion
Klein Enterprises, a Baltimore-based developer, has received a commitment of up to $200 million in capital from Almanac Realty Investors for a strategic expansion along the East Coast, which will include the acquisition of properties in both Washington, D.C., and Northern Virginia.
The deal with Almanac is a departure from past transactions, where Klein often teamed up with various partners on individual transactions. It will allow the firm to focus on executing its real estate strategy, as opposed to having to spend as much time on the capital markets side.
“The first thing it does for us is validate our thesis from the past few years of having a consolidated holding company, with ownership across a broad real estate portfolio, to allow us to leverage our ownership for growth going forward,” Daniel Klein, president of Klein Enterprises, told Commercial Observer. “It also gives us a lot of direction and freedom, in terms of knowing we have a dedicated capital partner that can allow us to grow over the next real estate cycle.”
The current plan is for Klein to deploy the capital over the next 36 months. The firm will utilize the capital to enhance and expand its diversified portfolio through continued acquisitions and development of multifamily, self-storage, industrial, flex/office and retail assets. Some transactions are already in the works, including two self-storage opportunities in the Baltimore area.
“We’ve focused pretty heavily the past five years on diversifying our portfolio into Virginia, and we have around 8 to 10 assets in the state, where we had none five years ago,” Klein said. “We’re going to continue to focus on the core of our portfolio being in a radius within 1 to 2 hours around Washington, D.C.”
Klein Enterprises focuses more on ground-up development of multifamily, and has developed almost 2,500 units in the last five years.
“We find we can generate better returns on developments than acquisitions, but we’re open-minded on evaluating both,” Klein said. “We’ll now be able to move quickly with transactions because we have this dedicated capital.”
“Klein Enterprises is a deep-rooted organization with a talented leadership team and a successful track record of value creation,” Madeline Wick, a senior vice president at Almanac Realty, said in prepared remarks. “The company is well positioned to continue to grow its diversified portfolio of residential and commercial real estate assets.”