Real Estate Developers Take on a Private Equity Role

There’s nothing unusual when a private equity player decides to target commercial real estate with a new fund. In this case, the PE firm is also a developer.

Al. Neyer, a 125-year-old commercial real estate development and design-build firm with offices in Cincinnati, Ohio; Pittsburgh, PA; Raleigh, NC and Franklin, TN, just closed its first real estate investment fund.

The company, with $808.8 construction signings since 2018 and 22 projects in 2020 alone, has raised $110 million from 105 investors. It expects to fund $300 million in class A industrial projects. Neyer plans to use debt along with equity, according to a report by the Cincinnati Business Courier.

“Until now, Al. Neyer would raise equity on a project-by-project basis,” the firm tells “Over the past several years, the company has experienced explosive growth, becoming 100% employee owned in 2014 and expanding to Nashville in 2015 and Raleigh in 2019.”

The firm has a pipeline of 20 projects that could mean as much as 12 million square feet of industrial space, given the demand from e-commerce and manufacturing. Neyer expects to “deploy all the equity within 12-18 months, and plan to launch additional funds once all equity is deployed.”

Neyer isn’t the only real estate with a burgeoning private equity arm. Boundary Cos., a Bethesda, Maryland-based firm founded in 2014, announced having closed its first investment fund, last month. Although Boundary didn’t disclose the amount of the fund, it did say it expected to undertake $300 million in investments.

Private equity has long been one source of capital for developers, designers, and builders. Although firms raising their own money isn’t “uncommon,” Peter C. Lewis, chairman of Wharton Equity Ventures, tells, “you are seeing a little more traction.”

One reason is financial self-interest for both the real estate firms and investors. Without private equity middlemen, the business gets more of the profit and limited partners have less investment dilution.

Projects like those of Neyer and Boundary are likely to be attractive because of their targeted nature. “Investments must also be very focused on sectors that are likely to outperform,” Paul Getty, CEO of First Guardian Group, tells “Both of these funds are targeting very hot sectors—last mile distribution centers and storage, which can also be a type of distribution center for smaller retailers and mom and pop entrepreneurs.”

“A lot of firms that do [property management, construction management, development] say, ‘If we can do all that, why can’t we also be in the funds game?’” Marc Feigelson, co-leader of the real estate and construction industry practice advisory group at accounting and consulting firm Kaufman Rossin, tells

“Real estate operators are getting smarter,” Lewis says. “They’re coming to the conclusion that it’s better to do this in house.”

Marc Feigelson, CPA, is a Chief Financial Officer at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.