Glen Allen, VA, December 18, 2012—Markel|Eagle Partners (M|E) today announced it has closed Markel|Eagle Partners Fund II, LLC (Fund II), a $55 million real estate private equity fund that targets residential, multifamily, office, retail and industrial opportunities throughout the Mid-Atlantic and Southeast regions. Since late 2011, Fund II has invested more than $10 million of fund equity in projects valued at over $40 million.
Fund II projects include a $5 million investment to help turn a former manufacturing facility in downtown Leesburg, VA, into a residential and retail development, and an investment in a Delaware waterfront residential development in conjunction with a Baltimore-based developer. Other Fund II investments include Richmond-based projects: Deep Run III, the former corporate headquarters for Circuit City; developed commercial and industrial land in eastern Henrico County; and raw land in eastern Goochland County. Since Fund II’s inception in November 2011, M|E has added resources to support its asset growth and geographic expansion.
M|E President Bryan Kornblau said the company raised more money in less time than it did with Fund I, which capped out at about $31 million. M|E’s mezzanine debt investment of $8.7 million, made in late 2009, gave the fund control over the residential portion of the then-unfinished West Broad Village mixed-use development in western Henrico County, VA. The project’s original developer, Florida-based Unicorp, sold the commercial portion of the now flourishing project last month for $161 million to San Diego-based REIT Excel Trust.
“Fund I was raised in an even harder climate,” Kornblau said. “First of all, the markets had recently crashed and people were facing losses in their investment portfolios. Secondly, despite a life-long track record of creating positive returns in real estate, when you have a ‘1’ after your fund’s name, it makes raising money more difficult as investors can perceive you as a beginner. The positive resolution at West Broad Village is an example of the success of our Fund I investments. We have been able to leverage this success in raising the capital for Fund II.”
Approximately 75 percent of the $55 million in Fund II was raised from individuals and small institutions in the Richmond metro area, Kornblau said, with many repeat investors from the initial fund. Richmond investment banking firm Davenport & Co. assisted the fundraising efforts. Fund II is expected to be fully invested in the next 18 to 24 months.
“Now we can get back to what we do best, and that is investing in real estate,” said Kornblau, also a longtime builder with Eagle Construction. “The fund will fill the void that has been created by the banks’ unwillingness to lend into speculative real estate investments, either residential or commercial.”
About Markel|Eagle Partners
Markel|Eagle Partners is a real estate investment company jointly owned by the Markel Corporation (NYSE: MKL) and Principals of the Eagle Companies. Markel|Eagle seeks debt and equity investments in residential and commercial real estate throughout the Mid-Atlantic and Southeast regions, including Virginia, Maryland, Delaware, North Carolina, South Carolina and Georgia. Markel|Eagle buys assets directly as well as through joint ventures with local operating partners. Markel|Eagle invests in equity, preferred equity and mezzanine debt vehicles. The firm, based in Glen Allen, VA, manages $95 million of discretionary capital and is currently investing Markel|Eagle Partners Fund II, LLC, a $55 million real estate private equity fund. For further information on Markel|Eagle, please visit www.markel-eagle.com.