Klein Enterprises, a long-operating, family-owned residential and commercial real estate developer based in Baltimore, has secured a $200 million investment to grow its footprint along the East Coast.
Company president Daniel Klein said the transaction marks the largest commitment to date for the firm, which has never had a single capital partner before. The funds from New York’s Almanac Realty Investors will be deployed over the next three years to increase Klein’s portfolio size and asset base, primarily in the MidAtlantic region, he said.
“It’s an exciting opportunity for our company, by having dedicated capital,” Klein said. “We grew to a certain size where we needed a long-term vision ... that was more structured and institutional in nature.”
Klein’s current holdings include luxury apartments, self-storage facilities and retail centers, totaling approximately 2,500 multifamily units and over 2.5 million square feet of commercial properties, according to the company.
The coronavirus pandemic and its influence over consumer culture has upended the real estate landscape as millions of workers switched to remote work and changed how and where they purchased goods and spent their leisure time.
Klein said the company will carefully assess market conditions before acquiring new properties, but is paying attention to grocery-anchored retail complexes and apartment buildings.
“We’re also waiting to see where government stimulus money ends up, and how it affects asset classes,” he added.
Klein formed a consolidated property holding company, KE Holdco LLC, in 2017. Daniel Klein said he first met representatives from Almanac Realty shortly after, but did not entertain the thought of having a single capital partner until after the coronavirus pandemic hit.
“The last 14 months feels like three to five years, but us closing a transaction like this, coming out of the pandemic, demonstrates strength of this team and organization,” he said. “It’s a testament that we’re able to execute what we’ve been trying to build here.”
Almanac Realty is a business unit of the investment firm Neuberger Berman, also based out of New York. Senior vice president Madeline Wick said Klein’s successful track record of value creation makes it an ideal partner.