Behringer Harvard, Heitman Form Multifamily Investment Partnership
- Dec 14, 2011
Dallas—Behringer Harvard Multifamily REIT I Inc. has entered into a new co-investment partnership with a major pension fund advised by Heitman LLC. The structure of the partnership will see the Heitman-managed entity acquire minority interests in 15 multifamily properties in eight states comprising 4,100 apartment units, which is slightly more than one-third of the REIT’s portfolio of apartment units.
The multifamily properties involved in the transaction are valued at more than $1 billion, according to the partners. Behringer Harvard Multifamily REIT I, which is retaining a majority ownership interest in all of the properties, will continue to manage each.
The partnership with Heitman represents the REIT’s second co-investment partnership with an international institutional investor. “The international investors with the most interest in U.S. multifamily properties are sovereign wealth funds, large insurance companies, pension advisors, and many other notable institutions of all sizes,” Jason Mattox, COO for Behringer Harvard, tells MHN.
“The multifamily asset class appeals to them, in part, as a result of significant and favorable demographic trends,” Mattox continues. “Echo-boomer demand has contributed to rising rents and improved occupancy fundamentals in the United States, and that trend is expected to continue.”
In 2007, Behringer Harvard Multifamily REIT I entered into a co-investment partnership with PGGM Private Real Estate Fund (PGGM), an investment vehicle for Dutch pension funds. PGGM initially committed $100 million for co-investments with the REIT, and later increased its commitment to $300 million.
To complete the Heitman transaction, PGGM sold its interests in 12 multifamily properties. A co-investment presence in the REIT’s portfolio has been retained by PGGM through ownership interests in 15 other multifamily communities, however. In addition to the interests sold by PGGM, the REIT sold minority interests in six multifamily properties to the Heitman-managed entity. In three instances, both the REIT and PGGM sold interests they held in the same property to the Heitman-managed entity.