Q & A: D4 Investments’ Rosacker on Investing $100M in Romania

Washington, D.C-based D4 Investments has opened an office in Bucharest, Romania, where it will launch its real estate and development company’s Eastern European operations. The firm was founded last year by former American Ambassador to Romania David Funderburk; Don Rosacker, a U.S. government relations specialist and business executive; and Dan Costea, a leading Romanian real estate lawyer. Rosacker, the managing partner, told CPN today that “We are excited to use our deep relationships and knowledge of the nation and region to bring significant investment while providing great returns for our stakeholders,” he said. The company has raised 100 million euros, approximately U.S$150 million, to begin its investments in Romania and has the ability to obtain more. He declined to discuss their backers. Contributing Editor Gail Kalinoski spoke with Rosacker today about the company’s plans for 2008 and beyond in Romania.CPN: What type of commercial real estate ventures do you think will work best in Romania now and going forward?Rosacker: We’re looking at a broad range of things including raw land aggregation, creating the highest and best use for it. We’re looking across the country, within Bucharest and literally to the borders. We’ve toured the country and see different things that look exciting. We’ve looked at different properties that might need demolition or environmental cleanup that can be repositioned into different industrial and commercial uses.CPN: Does D4 have any preference on what kind of projects to pursue?Rosacker: We don’t have one specific use in mind. We let the property define that. We really are looking for the right investments. We don’t have a leaning one way or the other. It’s more like what are the market factors, what are the property factors, what are the influencing factors, events and attributes of that property that make it the right investment for us.CPN: Do you anticipate partnering with others? Rosacker: There’s a broad set of skills in the group, but typically we are not a construction company. We don’t necessarily always look to develop the bricks and mortar. If we have a property, we may exit by selling to the next person, the developer who may put residential, industrial or offices on it or we may partner with the developer. We will look to create the best exit strategy for that property. We would lean toward the first (sell to a developer) but we are open to the second (forming partnerships).CPN: You have 100 million euros to start. Will you be continuing to raise capital? Rosacker: Our typical sweet spot is opportunities in the 15 to 50 million euros range. We have significant deep financial pockets behind us so we can look at deals with 100 million Euros or bigger. We’re starting with 100 million euros so people know we’re substantial and not just coming in here to do one or two small deals then go away. We’re here for the long run. We’ve been looking (for properties) for the last twelve months. We believe we will be closing on our first transaction in the first quarter and we plan many more.CPN: Do you feel Romania is ripe for investment, particularly because of the uncertain economy in the U.S.? Rosacker: We didn’t look at what was going on in the U.S. to drive us over there. We really felt that Romania is an exciting opportunity. It’s a beautiful country with great geography, natural assets and the accession into the European Union really brought a sense of opportunity for the country itself, for the people, for prosperity that really opened the door for a lot of people to come in and invest in the country. CPN: What is the economy like in Romania?Rosacker: They’re booming. The money is pouring in because it’s the right time, there is a need for growth and infrastructure. They’ve got strong leadership from the government. The leadership (the prime minister) is setting has been very pro-growth. They’re stepping up. The economy is moving forward and doing well. That’s part of the reason we are stepping in.