The Canada Pension Plan Investment Board (CPPIB) announced today that it has made further investments in its US multifamily portfolio over the past year. CPPIB has made equity commitments totaling more than $330 million for six Class A multifamily developments with existing joint venture partners in California, Georgia and Massachusetts.
When completed, the luxury rental properties will include more than 2,200 residential units, representing a gross asset value of approximately $740 million. Since its inception in 2011, CPPIB's US multifamily portfolio has grown to include direct joint venture interests in more than 8,400 units in eight markets. CPPIB's equity commitments in the sector total $1.3 billion, representing a gross asset value of $4.5 billion at full ownership share.
“US multifamily investments remain an attractive sector for CPPIB,” said Peter Ballon, vice president and head of real estate investments in the Americas, in a statement. “We believe that the limited supply of high-quality rental properties and other broad demographic trends such as forecast population growth, declining home ownership and the echo-boom generation reaching peak rental propensity all support continued growth in this sector.”
In partnership with Palo Alto, California-based REIT Essex Property Trust, CPPIB made a $77 million equity commitment to hold a 45 percent interest in the Pleasanton BART development in Pleasanton, California in the San Francisco Bay area. CPPIB also made a $39 million commitment to develop Phase III of the Essex Epic development in San Jose. Phase III will be a 200-unit residential development adjacent to the venture’s existing Phase I and II holdings.
CPPIB also expanded its joint venture platform with Chicago-based multifamily specialist AMLI Residential, acquiring 45 percent interests in two projects in Atlanta—AMLI Arts Center in midtown and AMLI CityPlace in Buckhead. CPPIB's equity commitment totals $117 million in those two developments, which will have approximately 1,000 units when completed.
Alongside open-ended real estate fund Multi-Employer Property Trust and Chicago-based developer Golub & Company, CPPIB committed approximately $90 million to acquire a 44 percent interest in Block 6, a 409-unit residential project in San Francisco.
Finally, the pension committed $11 million to develop and hold the Avalon North Point Lofts multifamily development with Washington, DC-based developer AvalonBay and German insurer Allianz. Located in Cambridge, Massachusetts, Avalon North Point Lofts is a 103-unit residential development.