Penzance Targets Metro Washington with $255M Fund

For its first private-equity fund, the investor-developer anticipates parlaying capital into a portfolio valued at $800 million to $1 billion
The Highlands

Real estate owner, operator and developer Penzance has closed its first real estate private equity fund. The Penzance DC Real Estate Fund LP (“Fund I”), with total equity commitments of $255 million, was launched to target value-add investments in D.C.-area residential, commercial and mixed-use real estate.

The discretionary fund’s investor base includes a diverse mix of institutional investors. They include endowments, foundations and family offices. Penzance anticipates targeting a portfolio size of $800 million to $1 billion of total capitalization for the Fund. In closing on two investments, Fund I is committing nearly 20 percent of its equity.

One of the two investments is The Highlands, a public-private mixed-use development located at 1555 Wilson Blvd. in the Rosslyn submarket of Arlington, Va., which is scheduled to break ground this month. The Highlands will feature three high-rise towers totaling 1.2 million square feet. The development will include 780 rental units and 104 condominium units, along with 40,000 square feet of retail. The Fund acquired an interest in The Highlands in August 2018.

The other investment, 1680 Wisconsin Avenue, is a three-story, 17,398-square-foot office building. Currently 100 percent leased to four tenants, the building is located within the desirable Georgetown submarket of Washington, D.C.

 “We are honored to partner with such distinguished investors and are grateful for their confidence in our team,” said Julia Springer, Penzance co-founder, in prepared remarks. “We intend to continue investing with many of our long-standing partners, to whom we owe so much of our success, by utilizing the Fund’s ability to make general partner agreements. The Fund builds on our performance over 22 years of adding value through local expertise and intensive operations in the Washington, D.C. region.”

The Fund can invest directly or as a general partner in joint ventures with other institutional partners, which should provide increased diversification and buying power.

Rendering courtesy of Penzance