Rappaport Gets a New Principal
The Rappaport Companies and Principal Real Estate Investors have formed a JV to acquire retail properties across the DC region, the firms announced last week. Rappaport's Henry Fonneville (flanked by firm COO Steve Pugh and CFO Frank Pieruccini) says Principal has co-invested $200M of equity with Rappaport, and that the new capital will be used to acquire retail assets "across the spectrum," including grocery-anchored and value-add centers. (Would they be willing to acquire a store for magicians?) The cash comes from the pension fund group of Principal Real Estate Investors, he tells us.
Some of the cash has already been used to recapitalize existing Rappaport assets like its Bristow Center in Prince William County (above), Henry says. He adds that although Rappaport has done a number of deals with pension funds in the past, the firm has always been impressed when working with Principal as a lender, and has considered bringing them in on the equity side before. And instead of reaching out to Principal deal-by-deal, "this was an interest in making those commitments ahead of time," Henry says. (With so much divorce these days, it's nice to read a true love story.) Patti Earnest and Paul Dougherty of Perseus Realty Capital arranged the deal.