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Bouwinvest makes US single-family rental debut

The Dutch pension investor has formed a joint venture with Man GPM to develop up to 1,000 net zero energy homes across the country.

Bouwinvest is entering the US single-family rental market through a $200 million joint venture that aims to deliver as many as 1,000 energy efficient homes in the coming years, PERE has learned.

The Dutch pension investor has teamed up with Man Global Private Markets, a London-based asset manager with roughly 5,200 rental homes throughout the US. Together, the firms will develop built-to-rent communities in suburban markets throughout the South, West and Midwest regions of the country.

Bert van den Hoek, Bouwinvest’s senior portfolio manager for North America, said the joint venture delivers on several key goals for the group’s constituents by increasing the housing supply, adhering to high environmental standards and tapping into a real estate sector with strong secular growth.

“We act on behalf of our beneficiaries, who are construction workers in the Dutch construction industry,” said van den Hoek. “We feel that investing on their behalf in net-zero homes in the US hits a sweet spot.”

All the homes will be built to a ‘net-zero energy’ standard, meaning their energy consumption will be offset by rooftop solar panels. They will also be outfitted with heating and cooling systems and appliances certified by the US Environmental Protection Agency’s Energy Star program. Energy-efficient building materials, low-flow water fixtures and low maintenance yards also will be incorporated into the properties.

Anthony Cazazian, Man GPM’s managing director and head of US residential real estate, said the homes built through the JV will be the firm’s first to target a net-zero energy standard, but he described the shift as a “natural evolution” for the platform. Man GPM entered the SFR space in 2012, began developing BTR communities in 2014 and has sought Energy Star certification for its new-built homes dating back to 2018, he said.

The first project will be built in a suburb of Charlotte, North Carolina, Cazazian said, adding that future developments will take place around similar high-growth metros. He expects the program to take several years to fully execute.

Cazazian declined to comment on the type of debt financing that would be used for the projects, but said he anticipates strong support from the capital markets.

“Given the nature of these developments, we feel like there will be a lot of interest on the financing side, both through traditional financing sources for the asset class, as well as those interested in directing capital to green initiatives,” he said. “I believe that market is going to evolve quickly, and tremendously over the coming years.”

Despite the added expense of optimizing energy efficiency in the homes, each of which will include at least three bedrooms, Cazazian said the firm has not factored premium rents into the underwriting of the developments.

“We believe the energy savings that will effectively be passed on to the residents will offset any rent differentials,” he said. “But this is very early innings. We’ll have to see the market evolve.”

Bouwinvest’s other net-zero rental homes in the Netherlands have been able to command higher rents from tenants who value a low-impact lifestyle, van den Hoek said: “What we’ve seen there is that, over time, people are willing to pay more.”

In 2020, van den Hoek opened Bouwinvest’s North American headquarters in New York. The group has since deployed roughly $2 billion into the US market, and it expects to invest between $300 million and $400 million more during the next three years. The group is aiming for between 30 percent and 40 percent of its US portfolio to be in residential assets.