Financial services conglomerate TIAA-CREF in conjunction with TIAA Henderson (TH) Real Estate, the joint venture between TIAA-CREF and Henderson Global Investors, has held a final close on CASA Partners VI. The vehicle, the sixth in a series of value-added multifamily housing funds, brought in $260 million in equity from investors.
CASA VI will focus primarily on investing in US workforce housing and will seek to provide its investors enhanced returns with high sustainable income. The total raised will give the platform approximately $420 million in buying power.
Henderson, which launched the fund prior to selling its North American platform to TIAA-CREF in April, originally was targeting $300 million for the vehicle. In September of last year, Henderson held a first close for the fund on $150 million, according to a filing with the US Securities and Exchange Commission. The previous fund in the series, CASA Partners V, also fell short of its original target, bringing in just $155.2 million despite an initial goal to raise $250 million, according to data from PERE’s Research & Analytics team.
“This is apartment investing with a difference,” said Jay Martha, managing director of North American real estate for TIAA-CREF Asset Management, in a statement. “The CASA strategy takes an integrated approach, combining multiple value-enhancing investment strategies with income-enhancing, low-cost specialty bond financing to meet its goals.”
Since its initial close, the CASA VI fund has acquired two properties: Boca Vista Apartments in Altamonte Springs, Florida and Paseo Park Apartments in Glendale, Arizona. Both transactions were financed through municipal bonds that are exempt from federal and, in some instances, state income tax in exchange for providing affordable workforce housing to communities, according to the statement. This debt strategy allows for “below market leverage” for the fund and “supports enhanced income returns for the investors,” the statement added.
The CASA team, which has been working on the fund series since 1993, was part of TIAA-CREF’s acquisition of Henderson’s US property business in April. Concurrent with the acquisition, TIAA-CREF launched a joint venture with Henderson called TH Real Estate, which is 60 percent owned by TIAA-CREF and 40 percent owned by Henderson.