New, Chinese-Backed Firm Is Targeting Massive, Obsolete Properties
Lantian Development and its Chinese partners are investing in metro-area properties often bypassed by more seasoned companies. In the last year, three of Lantian’s acquisitions total almost 300 acres, including its most recent acquisition: the purchase of the 204-acre former Comsat campus in Clarksburg, MD.
If you happen to speak Chinese you know that lantian translates to “blue (lan) sky (tian).”
And like most words in Chinese (or in English, for that matter) blue sky means more than just the heavens above; for Bethesda-based Lantian and its CEO, Brian McLaughlin (snapped relaxing in China between meetings), the term also reflects balance, sustainability, efficiency and concern about the environment, because he insists without that orientation “blue sky” are just words on a page, rather than a guiding operating principle.
It might also refer to the numerous properties Lantian and its Chinese partners have purchased since August 2014, when the US-based company was launched. Since then, it has reviewed more than $1B in potential real estate investments opportunities, but has chosen to invest in only a small percentage of them.
“Every time we’re outbid, we’re happy,” Brian says, “because it tells us that we’ve stuck to our investment discipline,” which was strongly influenced by Lantian’s Chinese partners.
The company and its partners wanted to create an investment vehicle that would find properties that didn’t score well in traditional underwriting analysis and fit the company’s own development model, ones the large US developers are not primarily interested in.
More than three quarters of Lantian’s portfolio has been the acquisition of buildings nearing the point of obsolescence. Such properties include the Comsat HQ on the I-270 corridor, which Lantian bought this month for $11.5M; the 63-acre former campus of Washington Bible College in Lanham, MD (pictured); the 31-acre, 429k SF Shady Grove office park in Rockville; and the former Washington Suites Hotel in Alexandria, VA, now being reimagined as The Mark apartments.
Brian says each of these properties, all at varying stages of obsolescence, has a story to tell and has one of three options: become or remain shuttered, be torn down completely or be renovated into something new and relevant.
For example, in acquiring the WBC campus, one concept calls for extending its seven-decade history as a learning site by creating a new secondary school for students from around the world (that's Brian on the right at a signing ceremony with a group that intends to use the campus).
To aid him in that development, Brian's enlisted the officials at George Washington University who built the GW campus in China. Another concept would turn the campus into housing for veterans.
The Mark in Alexandria, VA, began life as an apartment building in 1967 but its better days are behind it. It’s in a submarket undergoing rapid growth, including a rebuilt Landmark Mall, and is just over a mile from the Van Dorn Metro station. Brian says with partners Northpoint and Persimmon Capital, they will return The Mark to its original use as an apartment building of moderately priced studios and one- and two-bedroom units.
Another recent Lantian purchase is a 109-acre site in Prince George’s County that’s within walking distance to the Metro and just two miles from National Harbor. The immediate neighborhood has seen no new significant investment in more than two decades.
The land, vacant since the late '90s, was originally scheduled for a large church sanctuary, but those plans fell through. Lantian's plans include finding the appropriate partners to deliver a phased, transit-oriented residential community anchored by a new K-8 school.
Everything Lantian has done has been oriented toward integrating with mass transit—Metro rail or bus whenever possible. Brian rejects the idea that the company wants to go head-to-head with the smartest guys in town.
“Instead, we say we’re here to be a partner with the smart guys that have been here a long time," he says. "We want to help green-light projects that otherwise might stay undeveloped for years.”