New Richmond Fund Targets Real Estate

Got a battered stock portfolio? Local real estate financier John B. Levy may have just the prescription — if you are willing to shell out at least $200,000.

Levy and local CPA Steven Biegler have launched a $20 million real estate fund for wealthy individuals and entrepreneurs. The fund, Queenswoods Partners LP, invests primarily in real estate commercial properties — warehouses, shopping centers, office buildings and apartments. The minimum investment is $200,000.

“This is for sophisticated investors only,” Levy says. “We don’t want anyone’s last nickel.” The duo’s fund invests primarily in mezzanine debt, which is a type of real-estate capital that typically brings a higher return than mortgages and less risk than equity financing.

Levy is a well-known investment banker who has financed local projects such as the Turning Basin office building in Shockoe Slip, home to First Market Bank’s headquarters, and the Canal Crossing building at 15th and Cary streets. Levy is better known in the world of real estate finance, however, where his firm has managed the placement of $1 billion in real estate debt and equity. He also authors the well-respected Barron’s/John B. Levy & Company National Mortgage Survey.

Levy and Biegler decided to start the fund to fill a void. After the stock market crash, many investors flocked to real estate searching for a safe haven. But individual investors have limited options when it comes to real estate: investing in public real estate investment trusts, which are subject to swings in the stock market, or private REITS, which have high upfront fees and are geared toward institutional investors and pension funds.

“The money itself will be invested kind of along the East Coast, with primary interest in the Middle Atlantic States,” Levy says. “We have a healthy, skeptical view of real estate. We’re not going into this with blinders on.”

The group says more funds may come later. But for now, the group is capping the first Queenswoods Partners at $20 million. The fund, which officially launched last week, has already raised $1 million in commitments.

“We want to be in a position to properly invest the money and not be under immense pressure,” Levy says. — Scott Bass

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