Rothschilds' realty subsidiary invests $75 million in Merritt Now, area company can do 4 new projects

January 17, 1998|By William Patalon III | William Patalon III,SUN STAFF

The real estate arm of the Rothschild banking empire is investing $75 million in Merritt, a Baltimore-area commercial real estate development company.

Rothschild Realty Inc., through its Five Arrows Realty Securities subsidiary, yesterday said it was making the investment in Merritt, which owns and manages land and about 10 million square feet of light-industrial space sprinkled among Harford, Howard, Carroll, Washington and Anne Arundel counties.

The deal gives Merritt, which was highly leveraged, maneuvering room and the ability to take on new projects without having to sell the company outright.

Rothschild gets access to the vibrant Baltimore market.

The two partners have formed Merritt Properties LLC.

"One of the things this did for Merritt is to give [it] the chance to grow," said D. Pike Aloian, managing director of Rothschild Realty Inc.

Merritt principal Leroy Merritt said lenders were restricting what his company could do. With the new financing in place, he vows to start work on four new buildings totaling 300,000 square feet for completion next year.

"We were being limited by our lenders," Merritt said.

The company looked at restructuring its debt, and spoke with other investors, including real estate investment trusts (known as "REITs" in real estate lexicon). Merritt officials spoke with some of their counterparts at Rothschild, and later contacted the New York City-based real estate company about the capital infusion.

Aloian said Rothschild liked Merritt's market, business plan and management, and decided to make the investment.

Rothschild Realty was founded in 1981 as a division of the Rothschild Group, a privately owned global banking network with offices in more than 20 countries.

It now oversees several investment vehicles -- including its Five Arrows Realty Securities subsidiary -- with a total value of $1 billion.

4 Officials would not quantify Merritt's revenues.

The company, with its main office in Woodlawn, employs about 75 people. The Merritt Properties joint venture will be supervised by a six-member board -- with three members each coming from Merritt and Rothschild.

Pub Date: 1/17/98

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