BETHESDA, MD—Matt Clinebell and Adam Roffman both had comfortable careers as brokers at Avison Young. But then they received an offer they couldn't refuse: the chance to start their own value-add real estate investment platform backed by high-net worth individuals who believed in their acumen.
The two left their positions to launch last year Cascade Realty Partners. Nine months later they have closed on their first investment, a 30,361-square foot office building at a busy corner of Columbia Pike and Glebe Road in Arlington, VA. The company paid $4.8 million in cash for the building, located on 3401 Columbia Pike, which will continue to be largely occupied by Bank of America for another seven years.
That is okay with Cascade; the firm plans to have a longer buy-and-hold period than typical. "We like the property's long term upside," Clinebell tells GlobeSt.com. This upside includes the 1.5-acre site on which it sits and Columbia Pike Revitalization Organization's plan to streamline rezoning to allow for greater density.
The longer-than-average hold time is part of the firm's go-to-market strategy -- but it is not the chief distinction it is carving out for itself in a community saturated with value add investors all looking at the same inventory.
Clinebell explains:
"There are plenty of mom and pop investors and a number of equity investors that are willing to write checks of $10 million or more, which would finance deals of $25 million or more," he says.
"But there is little competition in the middle, for deals over $3-5 million and under $25 million."
"That is where we think we can compete."
The backers, whom Clinebell declined to name, are giving the two partners a relatively free reign. There is no set amount, in other words, that they have to invest, he says. "For the good deals the money will be there. We know we have that backing."
After the firm establishes a track record it will consider other options ranging from raising a fund, to continuing to do one-off deals to approaching institutional capital as a separate account.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
