AREA forms new multifamily venture

In its second such partnership this year, the New York-based real estate investor and fund manager is teaming with a South Florida developer to build apartment communities on behalf of its latest opportunity fund.

AREA Property Partners has established a partnership with CC Residential, a Coral Gables, Florida-based developer led by Armando Codina, to build apartment communities throughout South Florida. The projects built through the venture will be executed on behalf of AREA’s latest opportunistic real estate vehicle, AREA Real Estate Opportunity Fund VI.

The joint venture currently is developing two apartment projects in the region: The Signature at Doral, a 352-unit development in northwest Miami-Dade County, and The Signature at Davie, a 350-unit community in central Broward County. AREA is actively seeking additional projects in South Florida that also may be developed in partnership with CC Residential.

“We’re thrilled to expand our existing footprint in the South Florida residential market through this new development partnership,” said Richard Mack, AREA’s North America chief executive, in a statement.  “We believe that increasing demand for apartments, driven by economic and demographic trends in South Florida, support multifamily investment and development.”

Mack told PERE that in addition to South Florida, the firm was seeing a supply-demand imbalance in several other US multifamily rental markets that in some cases supported development.  “ In these markets we find the risk-adjusted returns highly favourable, and construction costs still moderate,” he said.

The Signature at Doral, formerly Lakeside at Doral, will comprise eight four-story buildings and is expected to be completed in September 2013, while The Signature at Davie, formerly Toscana at Davie, broke ground last month.

The partnership is the second joint venture that AREA has formed this year targeting apartments. In March, the firm announced that it had formed a partnership with Harbor Urban to focus on multifamily rental projects in Seattle. Under that joint venture, AREA will own a majority stake in the assets acquired.

The projects being undertaken through both partnerships are the initial investments being made through AREA’s opportunistic vehicle, which closed on $518 million in commitments last June. The firm’s opportunistic strategy currently is more focused on development.

Multifamily properties have been a major investment target for AREA, which has been pursuing value-added and opportunistic plays in the property type through acquisitions and development. The firm currently owns 22,000 apartment units in the US.