Canadian-based Ivanhoé Cambridge continues to grow its U.S. multifamily portfolio by investing $150 million of preferred equity into Mount Auburn Multifamily, a private real estate firm that owns and manages $2 billion of assets in high-growth secondary markets.
The investment expands the relationship between the two companies that started in June when they launched a joint venture to invest in preferred equity for ground-up multifamily developments. As part of the new investment, Ivanhoé Cambridge will join Mount Auburn’s Board of Directors and gain exposure to a diversified portfolio of multifamily properties.
Mount Auburn invests in multifamily properties on behalf of one or two global pension investors. The firm, along with its property management arm, Bluestone Property Management, was an early investor in the U.S. secondary market. The firm’s strategy is to focus on Millennial migration to markets with low-cost business-friendly environments, high population growth and low cost of living.
Target markets include Atlanta; Austin; Charlotte, N.C.; Columbus, Ohio; Dallas/Fort Worth; Denver; Houston; Indianapolis; Jacksonville, Fla.; Louisville; Nashville, Tenn.; Orlando, Fla.; Phoenix; Raleigh, N.C.; Salt Lake City; San Antonio, Texas; Tampa, Fla.; and the Washington, D.C., suburbs.
Charles-Antoine Lussier, Ivanhoé Cambridge senior vice president, said in a prepared statement the investment into Mount Auburn gives the firm exposure to a portfolio with more than 10,000 units in markets that are well-positioned for durable growth. He added it was another step towards the diversification of Ivanhoé Cambridge’s residential investments. The firm, the real estate subsidiary of global investment group Caisse de dépôt et placement du Québec, owns 45,000 residential units and has been particularly active in the U.S. multifamily sector.
Lussier said Ivanhoé Cambridge expects to continue to grow its relationship with Mount Auburn and pursue additional investments in multifamily assets with other targeted partners.
Last month, Ivanhoé Cambridge formed a joint venture with Walker & Dunlop Investment Partners to make preferred equity investments in multifamily, student housing and manufactured housing properties primarily in the top 25 MSAs in the U.S. The joint venture’s first transaction was an approximately $4 million preferred equity investment into a joint venture with Pegasus Real Estate to acquire the 240-unit Collection at Overlook, now rebranded as Cornerstone at Overlook, in San Antonio.
The second transaction was a $5.6 million preferred equity investment into a joint venture with Valor Residential to acquire Overlook at Farragut, a recently delivered 267-unit multifamily property in the Farragut submarket of Knoxville, Tenn.
Hogan Lovells LLP served as legal counsel to Ivanhoé Cambridge. Szenberg & Okun PLLC served as legal counsel to Mount Auburn Multifamily.