PFA Buys Stake in $1B U.S. Housing Portfolio

Much of the U.S. economy is in a deep freeze, but deals are still closing in the multifamily investment space, with Danish pension giant PFA Pension buying a minority stake in a 13-asset apartment portfolio across the U.S. with an aggregate value of nearly $1.1 billion.

PFA purchased a 49 percent equity interest in the 3,487-unit portfolio through a newly formed REIT joint venture with Simpson Housing LLLP, which had previously owned 100 percent of the assets. Simpson Housing will serve as the portfolio’s property manager. Domain Capital Advisors, part of Domain Capital Group LLC, will provide oversight and asset management of the REIT entity.

The portfolio is spread across high-growth markets in the South and West including Austin, Texas; Charlotte, N.C.; Denver; Houston; Nashville, Tenn.; Phoenix; Portland, Ore.; and Seattle. Located in urban and suburban markets, the apartment units are about six years old and average and more than 95 percent leased at the time of the sale.

Domain Capital Group CEO Patrick R. Leardo said in a statement that the company has managed equity investments in Simpson Housing’s portfolio for more than 10 years and intends to build its new partnership with PFA through further acquisitions. 

Accord Capital Partners LLC served as the financial advisor for the transaction. Domain Capital Group managed roughly $6.1 billion in assets as of year-end 2019. PFA is estimated to have total assets in excess of $85 billion, according to the Sovereign Wealth Fund Institute.

Privately held residential developer and manager Simpson Housing sold a 562-unit Class A portfolio across the Seattle metro to Nuveen Real Estate for $244.6 million last year.