Germany’s BVK to Invest $805M in US Multifamily

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The company started a USAA Real Estate Company-sponsored evergreen independent account to target core, build-to-core and value-add acquisitions.

moneyBVK has initiated a USAA Real Estate Company-sponsored evergreen independent account. The account has been created for the purposes of investing $805 million in core multifamily properties within the United States. The move comes in the wake of BVK’s 2016 announcement it plans to add four specialized mandates focused on U.S. markets, including multifamily.

The program strategy’s execution will call for USAA Real Estate Company (USAA RealCo) to target core, build-to-core and value-add acquisitions.

These acquisitions will be situated in premier, central neighborhoods within major U.S. metropolitan market areas. The mandate’s objective is to assemble a portfolio of best-in-class rental properties that will generate robust cash flow yield, and in addition will demonstrate substantial potential for appreciation.

These goals correspond to BVK’s long-term perspective and objective.

USAA RealCo will invest a 10 percent ownership interest in all future acquisitions. The company will invest up to 30 percent in all future ground-up development transactions.

The mandate was seeded with a portfolio comprised of six recently built, urban infill and transit-oriented properties in five major markets.

Collectively, the properties total 1,600 units and 36,000 square feet of retail. Each of the seed assets is in irreplaceable, high-quality urban locations. Among the most important characteristics driving the success of these markets are excellent demographics, strong population and employment growth and substantial barriers to entry.

BVK is dedicated to growing its U.S. market exposure, particularly in multifamily, the company’s head of real estate investment management Norman Fackelmann said. “We believe the multifamily sector offers strong risk-adjusted returns over the long term,” he noted. “And USAA RealCo’s performance has proven to be exemplary in this segment, as the firm has consistently outperformed the NCREIF NPI Multifamily benchmark.”

Added Len O’Donnell, USAA RealCo president and CEO: “BVK is one of the world’s leading investors in real estate, and we are honored they selected USAA Real Estate Company to manage this significant mandate.

“Under the leadership of Hailey Ghalib, we have established a best-in-class multifamily platform, and this provides a wonderful extension of that business. We look forward to a long and successful partnership as we execute this strategy with BVK.”

Along with the other institutional real estate fund mandates from BVK, Frankfurt-based Universal-Investment GmbH will administer this mandate on BVK’s behalf.

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