Madison International buys stake in multifamily REIT

The New York-based private equity real estate firm has acquired an interest in Monogram Residential Trust. 

Madison International Realty has purchased 5.3 percent of the outstanding shares of Monogram Residential Trust, a Plano, Texas-based real estate investment trust for $81 million, on behalf of its latest real estate fund, Madison International Real Estate Liquidity Fund V. Monogram, formerly known as Behringer Harvard Multifamily REIT I, invests in, develops and operates multifamily communities in 12 states.

“Monogram focuses on multifamily residential investment and development opportunities in high-growth urban areas, with a portfolio of distinctive multifamily communities,” said Ronald Dickerman, Madison’s founder and president, in a statement. “We believe the company’s shares have been trading at a discount, due to its long tenure as a non-listed REIT and the significant liquidity needs of its existing shareholders, and because it is still relatively unknown. We think Monogram offers robust growth potential and is a good fit with our differentiated investment strategy.”

Formed in 2006 by Behringer Harvard, the REIT currently holds 56 multifamily properties totaling 16,126 units. The company has the youngest portfolio among listed multifamily REITs, with an average age of approximately 5 years, according to a November investor presentation. The REIT became a self-managed entity last June and rebranded as Monogram.

Madison focuses on acquiring partial ownership, joint venture, private REIT and listed shares in Class properties and portfolio in the US, UK and Western Europe. The firm also provides joint venture equity to owners, sponsors and investors that are seeking to monetize existing equity stakes, restructure balance and sheet or replace existing capital partners.

Madison raised a total of $825 million for Fund V last year, surpassing its original $750 million target. The vehicle already had deployed approximately 40 percent of its committed capital at the time of its final close last spring. The fund, which purchased a 50 percent stake in The High Street Shopping company in Oslo in September, is now 80 percent invested.