Centerbridge Pays $750M For Stake In Family-Owned Development Firm

Alternative asset manager Centerbridge Partners acquired an ownership interest in Merritt Properties with a $750M investment.

The New York-based firm acquired the stake from Almanac Realty Investors, a subsidiary of Neuberger Berman. But the deal isn't the end for Almanac's nearly 30-year stake in Merritt — Almanac participated in the Centerbridge investment, according to a release.

Maryland-based Merritt, which has developed and owned hundreds of office, industrial and retail buildings since its inception in the 1960s, is also making some changes in leadership.

Robb Merritt, who served as the company's president, was appointed CEO, succeeding Scott Dorsey, who transitioned to executive chairman. Bobby Lanigan, who has led the company's acquisition and strategic growth initiatives, was named president.

"We are excited to work alongside Centerbridge and Almanac, two organizations that share our investment philosophy," Lanigan said in a statement. "This additional capital will allow us to expand our portfolio, pursue new opportunities and continue serving customers at the highest level."

Jefferies Private Capital Advisory served as the financial adviser, and Miles & Stockbridge and Kramon & Graham provided legal counsel for Merritt Properties. CBRE served as real estate adviser.

Centerbridge was in negotiations to purchase the minority stake in May in a deal that valued the family-owned company at $3B, including debt, the Financial Times reported at the time.

Merritt didn't respond to a request for comment on the deal's valuation.

The investment will fund Merritt's planned expansion in the shallow-bay industrial sector, focusing on buying and building warehouses in Maryland, Virginia, North Carolina and Florida. The company also plans to expand into new markets.

After a construction boom of big-box warehouses used for distribution during the pandemic resulted in years of oversupply, shallow-bay industrial buildings — or those 50K SF or smaller where multiple tenants can take spaces — have become relatively undersupplied.

"Shallow bay industrial is a high-conviction theme across our real estate platform, and Merritt is exactly the type of best-in-class, vertically integrated operator we look to partner with," Centerbridge Senior Managing Director and co-Head of Real Estate Matt Dabrowski said in a statement.

Centerbridge has $47B in assets under management in private equity, private credit and real estate. The company has deployed more than $12B in real estate since 2005, according to its website. It also owns stakes in Indus Realty Trust, Modal and Suntex Marinas.