BETHESDA, MD-RLJ Development has closed its third private equity real estate fund, a $1.2-billion pool of equity commitments that, when leveraged, will give the privately held firm nearly $4 billion in purchasing power. At least 16 institutional investors have contributed to RLJ Real Estate Fund III LP or RLJ Fund III, including several major public and corporate pension funds, financial institutions and a hospitality entity. Real estate investment bank Presidio Partners represented RLJ in the fund.

RLJ’s strategy is to acquire and develop upscale service hotels with premium brands in urban markets or dense suburban areas near major cities. Last year, for example, for its Fund II it acquired the New York LaGuardia Airport Marriott for $69 million from LaSalle Hotel Properties. RLJ closed Fund II in September 2006 with $743 million of commitments, giving it a total purchasing power of nearly $2.5 billion. Major public and corporate pension funds, financial institutions and a hospitality entity–numbering 15 institutional investors all together–participated in that fund.

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