December 9, 2011
By Nicholas Ziegler, News Editor
Behringer Harvard Multifamily REIT I Inc. has just entered into a new co-investment partnership with one of the world’s largest pension funds, advised by Heitman L.L.C., a multinational real estate investment management firm with more than $23 billion of assets.
As a result of the partnership, the Heitman-managed entity has acquired minority interests in 15 multi-family communities across eight states. The total portfolio, which has 4,100 apartment units, is slightly more than one-third of the REIT’s entire portfolio under management and is valued at more than $1 billion.
The Behringer REIT has been busy in the second half of 2011, purchasing the 132-unit luxury multi-family Renaissance in Concord, Calif., in September and selling the 390-unit Waterford Place apartment community in Dublin, Calif., in May.
“This additional infusion of institutional co-investment capital provides further market validation of the institutional quality of the asset portfolio our REIT has assembled thus far, as well as its perceived value,” Mark Alfieri, COO of the REIT, said. “As our REIT continues to expand its asset portfolio, we will constantly evaluate both strategic acquisition opportunities and disposition opportunities.”
The partnership with Heitman represents the REIT’s second co-investment partnership with an international institutional investor. In 2007, the REIT entered into a co-investment partnership with PGGM Private Real Estate Fund. PGGM initially committed $100 million for co-investments with the REIT, and then subsequently increased its commitment to $300 million.
To complete the Heitman transaction, interests in 12 multifamily communities were sold by PGGM. A co-investment presence in the REIT’s portfolio has been retained by PGGM through ownership interests in 15 other multifamily communities.
In addition to the interests sold by PGGM, the REIT sold to the Heitman-managed entity minority interests in six multifamily communities. In three instances, both the REIT and PGGM sold interests they held in the same multifamily communities to the Heitman-managed entity.