The National Pension Service of Korea (NPS) has acquired minority interests in 15 US multifamily communities, comprising 4,100 apartment units located in eight states and valued at more than $1 billion, PERE has learned. NPS is being advised by global real estate investment management firm Heitman.
Documents with the SEC reveal that the Korean pension purchased the 45 percent ownership stakes from a REIT managed by Dallas-based real estate investment firm Behringer Harvard. The properties represent a little more than one third of the Behringer Harvard Multifamily REIT portfolio. The Behringer Harvard REIT, which has retained a 55 percent ownership interest in each asset, will continue to serve as the day-to-day manager of the properties.
The majority of the properties are in California and Texas. The remaining assets are in Colorado, Oregon, Virginia, New Jersey, Nevada and Massachusetts.
Robert Aisner, president and chief executive officer of Behringer Harvard, said in a statement: “This opportunity to co-invest with institutional investors of the highest caliber was especially compelling for us, and we warmly welcome their participation in our multifamily investment platform.”
Mark Alfieri, chief operating officer of the REIT, added: “This additional infusion of institutional co-investment capital provides further market validation of the institutional quality of the asset portfolio our REIT has assembled thus far, as well as its perceived value. As our REIT continues to expand its asset portfolio, we will constantly evaluate both strategic acquisition opportunities and disposition opportunities, as appropriate, that could provide attractive upside potential for our shareholders.”
The partnership with NPS represents the REIT's second co-investment partnership with an international institutional investor. In 2007, the REIT entered into a co-investment partnership with PGGM’s Private Real Estate Fund, an investment vehicle for Dutch pension funds. PGGM initially committed $100 million for co-investments with the REIT and subsequently increased their commitment to $300 million.
In addition to the interests sold by PGGM, the REIT sold minority interests in six multifamily communities to NPS. In three instances, both the REIT and PGGM sold interests they held in the same multifamily communities to the Korean pension.
The REIT's portfolio consists of ownership interests in 42 multifamily communities in 13 states, comprising 11,112 units. Twelve of these assets are wholly owned by the REIT, 15 are owned in joint ventures the REIT formed with PGGM and 15 are now owned by joint ventures the REIT formed with NPS.