JV to Invest $550M in National Portfolio

Cortland Partners, Canada Pension Plan Investment Board and GIC plan to acquire and renovate 8,000 to 10,000 Class B multifamily units across the U.S.

Lakecrest at Gateway
Lakecrest at Gateway Park, Denver

Cortland Partners, Canada Pension Plan Investment Board and GIC have formed a joint venture with a targeted equity amount of $550 million to acquire and renovated 8,000 to 10,000 Class B multifamily units across the U.S. CPPIB and GIC will own a 45 percent interest in the venture each, while Cortland will own the remaining 10 percent. 

To date, the joint venture has acquired three value-add, garden-style communities in major metros: Lakecrest at Gateway Park in Denver, Aurum Falls River in Raleigh, N.C. and Waterstone Apartments in Austin, Texas. The companies will continue investing in properties that offer a focus in value-add strategies, mainly in markets throughout southern and southeastern U.S. 

“This partnership with CPPIB and GIC allows us to purse a long-term strategy within Class B multifamily that continues to offer compelling returns,” Mike Altman, chief investment officer, Cortland Partners, told Multi-Housing News. 

A look at the properties 

Aurum Falls River
Aurum Falls River, Raleigh, N.C.

Lakecrest at Gateway Park is situated at 4699 Kittredge St. and offers 440 units. Constructed in 2001, the community features one-, two- and three-bedroom floorplans ranging from 689 to 1,314 square feet, across 22 two- and three-story buildings. According to Yardi Matrix, the asset is currently 98 percent occupied, with interior features being washer/dryers, fireplaces, high ceilings, private balcony/patios and views of a man-made lake. Residents have access to amenities such as a fitness center, business center, clubhouse, volleyball court, swimming pool, spa, laundry facilities, detached garages and 450 parking spaces. The property was purchased for $101 million from Bascom Group, in which the transaction was subject to a $78.6 million Freddie Mac loan. 

Situated at 1302 Rio Valley Drive, Aurum Falls River features 284 one-, two- and three-bedroom apartments ranging from 722 to 1,602 square feet. Built in 2001, the community comprises 13 two- and three-story buildings. Interior features include private balcony/patios, high ceilings, washer/dryers and fireplaces. Residents have access to amenities such as a fitness center, business center, clubhouse, playground, swimming pool, laundry facilities, outside storage and 600 parking spots. According to Yardi Matrix, the joint venture acquired the community from Bell Partners for $45.7 million, subject to a $36.7 million Freddie Mac loan. The property is currently 94.4 percent occupied. 

Waterstone (00000002)
Waterstone, Austin, Texas

Located at 420 West Slaughter Lane, Waterstone comprises 208 units and is currently 93.5 percent occupied. Built in 2006, the community offers one-, two- and three-bedroom floorplans ranging from 690 to 1,362 square feet. Interior features include washer/dryers, monitored security and vaulted ceilings. Residents have access to amenities such as a fitness center, business center, clubhouse, swimming pool, laundry facilities and 716 parking spaces. Encompassing 14 two- and three-story buildings, the property was purchased from SCI Real Estate Investments and subject to a $32.3 million Freddie Mac loan.

“The U.S. multifamily real estate sector continues to offer compelling risk-adjusted returns for the CPP Fund, driven by favourable population growth and employment trends,” said Hilary Spann, managing director, Head of Americas, Real Estate Investments, CPPIB. “By focusing on Class B asset opportunities, this joint venture enables us to add diversification to our U.S. multifamily portfolio, which is concentrated in prime urban locations.”

Images courtesy of Cortland Partners