WASHINGTON, DC- A new real estate investment fund has launched with $35 million initially raised and a goal of raising $200 million all together. The fund will target development projects in the Washington-Baltimore region that are being constructed with 100% union labor. It is sponsored by Regional Real Estate Investment Corp. of Plymouth Meeting, PA and New York City-based Real Estate Capital Partners Develop-DC LP.

The fund’s ultimate purchasing, or investing, power will be about $500 million to $700 million, David Reiner, director of RREIC, tells GlobeSt.com. “We'll lever at the project level, at about 55% to 65%,” he says.

The term of the fund is three years. Expected returns for investors will be in the mid-teens—the same as most funds. “We don’t think there's as big a delta between projects built with union labor and non-union labor as some people think there is,” he says--especially in the DC area where many projects have been built with 100% union labor. Reiner does acknowledge that some developers may not want to deal with the fund because of that requirement.

The fund will provide equity, bridge financing or mezzanine loans to local and national developers for new ground-up development or projects requiring major renovations. The financing is short term, Reiner notes—but the fund does not intend to cut and run until the project is leased up and stabilized.

“We're looking to partner on quality projects and give them the support they need,” says Reiner, who expects more investors will participate in later rounds. “For whatever reason, there's usually a sizable group of investors that don't participate in first rounds no matter what. But our discussions with some of these investors tell us that they'll be participating in later closes.”