HANSAINVEST launches $500m US multifamily fund

The Hamburg, Germany-based investment manager’s new vehicle represents its first US real estate offering.

German investment manager HANSAINVEST Hanseatische Investment-GmbH is betting on the US multifamily sector with a new open-ended fund.

HANSAINVEST has launched HANSA US Residential, an open-ended core fund with a $500 million equity target to purchase about $1 billion worth of property managed by Greensboro, North Carolina-based Bell Partners, a multifamily operator. The vehicle is HANSAINVEST’s first US-focused property fund.

The Hamburg, Germany-based fund sponsor, which is the investment arm of mutual insurance group Signal Iduna Group, is targeting German institutional investors that want exposure to core US residential properties. HANSAINVEST predicts a 4.5 percent annual yield for the vehicle.

HANSAINVEST has allocated $250 million to the fund, and Bell Partners is co-investing up to 5 percent on a single-asset basis, according to a HANSAINVEST spokesman.

Nicholas Brinckmann, HANSAINVEST’s managing director, explained the rationale for investing overseas in the Tuesday statement. “The positive development of the overall economic and demographic data provides a clear argument in the long term for investments in the US residential real estate market,” he said. “What’s more, the legal framework makes it possible to increase rent for residential real estate in the US at much more regular intervals than here in Germany. From the perspective of investors, this is a great benefit.”

With capital from the fund, the firms plan to invest in major cities, spending between $50 million and $100 million for apartment complexes with between 150 units and 550 units, then holding the assets for at least five to seven years, according to the statement. The firms have not yet deployed capital from HANSA US Residential, but plan to do so before the end of the year.

Bell Partners’ last publicly disclosed transaction was the August purchase of Bell Summit at Flatirons in Broomfield, Colorado. The firm bought the 500-unit apartment complex for $116.3 million, according to real estate data provider Real Capital Analytics.

HANSAINVEST manages over €23 billion overall, with €5.3 billion invested in real estate. The firm’s previous US investments have been largely office properties managed by third parties, according to a spokesman.