Belay inks another programmatic JV

The Los Angeles-based firm is the first institutional partner for a southern US, multifamily-focused firm.

Belay Investment Group has entered into its initial joint venture with Eagle Property Capital Investments, the groups said Thursday.

Belay, a Los Angeles-based investment firm, bought a 49 percent stake in a 5-property multifamily portfolio from Miami-based EPC, which comprised the seed assets of its third multifamily fund, for an undisclosed figure.

The firms also formed a JV to buy and reposition up to $269 million of multifamily assets, largely in high-density submarkets in Florida and Texas. The JV is targeting Class B and C properties with 150 units or more, focusing on workforce housing for middle-income renters.

“We are very excited about our venture with EPC to pursue a strategy that so clearly capitalizes on one of the strongest demographic trends in the US, the growth of the Hispanic middle class,” Barry Chase, a managing principal at Belay, said in Thursday’s statement.

The firms noted that Hispanic households are predicted to make up more than half the growth in renter households through 2023.

Capital for Belay’s investment in the JV comes from Belay Partnership Ventures II, which launched in November 2014 with a $500 million target. Belay held a first close on the value-added vehicle in March on a $200 million commitment from the California State Teachers’ Retirement System, PERE previously reported. Belay set a net internal rate of return goal of between 12-13 percent for the fund.

With capital from the fund, Belay is funding programmatic JVs across the US and in multiple property types. In June, Belay entered a joint venture with Arc Capital Partners to invest up to $150 million in multifamily and retail real estate in California and Texas. The Belay-Arc JV was the first capital deployment from the fund.

EPC’s investment is funded from EPC Multifamily Partners III, which launched in 2015, according to the firm’s website. The firm is targeting $100 million of commitments for the vehicle, with an investor base made up of high-net-worth individuals and family offices, a spokeswoman said. EPC, which was founded in 2011 and manages $200 million in assets, is targeting a high teens gross return for properties in the value-added fund.