Neuberger Berman Arm Commits $320M to Workforce Housing

The Cove at Covington Town Center in Covington, Ga. Image courtesy of Haven Communities

Investors continue to bank on America’s middle-market apartment sector, with an arm of asset management giant Neuberger Berman committing $320 million to funds managed by Asia Capital Real Estate (ACRE) to invest in workforce housing.

A fund managed by Almanac Realty Investors, the private real estate investment arm of Neuberger Berman, made the capital commitment, which will provide strategic growth capital to ACRE’s general partner and investment manager. The capital infusion will also anchor investments in their upcoming series of multifamily-focused private equity and debt funds.

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ACRE has already deployed more than $300 million in loans, with the support of Almanac and other investors, and aims to invest more than $2 billion through its upcoming private equity funds. The company’s Founding Partner Michael Van Der Poel noted in a statement that investors are increasingly drawn to middle-market multifamily assets in a time of volatility as they offer a relatively stable long-term outlook.

Middle-market focus

Almanac will own a minority stake in ACRE and will anchor its fourth equity fund, according to a Bloomberg account. The fund will reportedly invest in multifamily properties in the Southeast, Midwest and Texas. ACRE, a global real estate private equity firm based in the U.S. and Singapore, manages private equity and debt funds that have invested more than $2.7 billion with a focus on multifamily. The company has more than 22,000 apartments across 31 cities in its portfolio.

ACRE made a series of moves across the country last year, including teaming up with Haven Communities to build a 350-unit luxury community in suburban Atlanta, which started construction in December. In November, the firm provided a $78.5 million bridge loan through its ACRE Credit debt fund to City Club Apartments for the final phase of construction of a luxury community in downtown Detroit. ACRE has also been active in Texas, Miami and Cincinnati.

Almanac joins other institutional investors that are ramping up their exposure to workforce housing, including private equity real estate firm Turner Impact Capital, which recently closed its Turner Multifamily Impact Fund II with more than $350 billion of committed capital. The workforce housing vehicle aims to acquire and manage up to 10,000 multifamily units.