Bernstein: Back to the Future

For those of you who think the market's slowed, the Bernstein Companies want you to know:  They're ready to buy $250M worth of distressed properties in the next 12 months, in any asset class but retail, and preferably in a bunch of smaller deals ($10-25M equity). The storied third-generation, family-owned investment firm is revving up its opportunity funds and private REIT under moniker Bernstein Consortium Capital. We went to visit them in their Georgetown Papermill digs last week, where they told us they're returning to their roots: seeking deals with a lot of "hair" on them that are too small or lacking in near-term return to meet the high institutional hurdles of investors like Carlyle.

COO Marc Duber and president Adam Bernstein flankPeyton Jenkins, Bernstein's new Acquisitions Manager who heads up deal sourcing. Adam is the grandson of founder Leo Bernstein and son of Chairman Stuart Bernstein. Over the years the opportunity funds bought and sold more than 30 properties, like a vacant old warehouse in NoMa they held onto a while and sold to X-M Satellite as its headquarters, andColumbia Women's Hospital (where they purchased the note from the Bank of Tokyo and were taken out by JBG). Bernstein Consortium Capital holds $243M in property in a private REIT (1990 K, Ballston Towers, Reston Sunrise I and II), and in its funds has Campus Commons in Reston, the Aerospace building in Greenbelt, and a development site at 3rd and G NW. As in the 90s, they're set again to underwrite deals where owners are looking for a quick fix through a sale, equity infusion, or mezzanine financing.

We had the pleasure of meeting the company founder, 93-year-young Leo Bernstein, who was in for lunch with grandson Adam. Leo started the company in 1933, so if our math is right, this year the firm celebrates a whopping 75 years. Leo says his main hobby is running the Wayside Inn out in Middletown, Va, which he bought back in the 50s, the longest continuously running inn in America.

Adam and Marc pull up a chair with Bernstein managing directorJoe Galli, center, who also happened to be Adam's roommate back in undergraduate days at Wharton. But the guys don't just sit around reminiscing. In recent activity, they tell us that last Monday they closed on the sale of 1750 K Street to Sumitomo for $76 million, brokered by Dek Potts and Jim Meisel at HFF. And Adam hasn't forgotten the family tradition at the firm: Although they're still in school, he's got four kids coming up.

Source: Bisnow