Paladin Realty Partners has formed a new $100 million programmatic joint venture with YOU Inc. Incorporadora e Participações to build middle-income housing in São Paulo, Brazil. The investment, which consists of a commitment of up to $75 million from Paladin and approximately $32 million from YOU, represents Paladin’s first investment on behalf of its fourth Latin America-focused real estate fund, Paladin Realty Latin America Investors IV.
The new YP II Homebuilding Platform, which potentially can develop more than 2,500 housing units with a total value of more than R$1 billion (€388.69 million; $503.67 million), is Paladin’s largest programmatic joint venture to date. The firm’s largest single investment was the acquisition of a large stake in a Brazilian publicly-traded real estate company called Viver, then known as INPAR, in 2009 on behalf of its third Latin America real estate fund, Paladin Realty Latin America Investors III.
Paladin held a first close for LatAm IV last month, raising $75.7 million from existing investors, according to a filing with the US Securities and Exchange Commission. The new joint venture with YOU will be funded with capital raised through LatAm IV, as well as co-investment vehicles.
YOU, which was founded three-and-a-half years ago, has launched 18 projects comprising more than 2,200 units and R$820 million in value. Its founder, Abrão Muszkat, was Paladin’s first Brazilian partner in a previous business relationship that began in 1999.
To date, Paladin and Muszkat have partnered on 41 projects spanning three of the firm’s previous funds and encompassing more than 6,600 units totaling more than $2 billion in value. Last April, Paladin announced it had committed approximately $40 million to YOU, with the investment to be used for project equity requirements, land purchases and working capital needs.