A joint venture between Kohlberg Kravis Roberts & Co (KKR), Pfeffer Capital and CP Realty has acquired a parcel of land in Williston, North Dakota, to develop a permanent residential community to accommodate the population influx that the region is experiencing.
The New York-based private equity giant and Lakewood, Colorado-based CP Realty bought into a partnership controlled by Pfeffer Capital, which owned the land. Although terms of the transaction were not disclosed, sources told PERE that the project will cost the partners a total of $150 million in equity.
The project, known as The Ridge at Harvest Hills, includes 164 acres of land overlooking the city of Williston. Construction of infrastructure for the current phase is under way and will support development of up to 330 apartment units, which are scheduled to commence in spring 2013, plus the completion of lots intended for sale to homebuilders for construction of 500 single-family, townhouse and duplex homes.
Creating a new neighbourhood to attract families is a key step in the sustainable development of Williston, where an estimated 15,000 oil and gas professionals are living in various forms of temporary housing, including camps, recreational vehicles and hotels.
Ralph Rosenberg, global head of KKR’s real estate team, said: “This is a long-term investment to support the structural needs of a growing community. Because of the energy boom, North Dakota has had an influx of new residents, and our experience in the unconventional oil and gas business gives us confidence that this is not merely a temporary development.”
Rosenberg added: “While Williston does have a supply of short-term housing, the city suffers from a shortage of sustainable communities that encourage employees to move their families or start them and reside permanently in Williston.”
Pfeffer Capital was form in 2011 by John Pfeffer, who originally was an executive at KKR heading the private equity firm’s investments in the European retail industry. In a statement, he said: “Our interest in investing in the technology-driven revolution in tight oil and gas production led us to Williston and the vision to create a substantial, attractive and permanent new neighbourhood for families in this exciting and friendly town.”