PGGM Private Real Estate Fund (PGGM) has earmarked an additional $300 million to co-invest in US multifamily properties with Behringer Harvard Multifamily REIT I. The new agreement will double the amount of capital that the Dutch pension fund services provider has committed to its partnership with the Dallas-based REIT to date, having previously co-invested the same sum in three separate tranches of $100 million.
PGGM and Behringer first established its partnership in May 2007, when the pension fund administrator agreed to co-invest up to $100 million with the REIT in apartment communities located in top metropolitan areas across the US. As of September 30, PGGM and Behringer jointly had invested in 28 multifamily properties with a total cost of approximately $1.6 billion. Generally, PGGM owns a 45 percent stake in each co-investment asset, while the REIT holds the remainder.
With the new co-investment agreement, the partners expect to deploy about $1.3 billion, which would include both equity and debt, in multifamily assets over the next several years. PGGM – which currently manages approximately $210 billion in pension assets on behalf of five pension funds representing some 2.5 million people – will invest the $300 million in several of the REIT’s existing development projects as well as future acquisitions and developments.
The expansion of PGGM’s partnership with Behringer Harvard follows the formation of a new retail joint venture with Inland American Real Estate Trust last May. That partnership, which will have a total levered value of more than $600 million, will target stabilized multi-tenant retail shopping centers in Texas and Oklahoma. PGGM, which holds a 45 percent interest in the joint venture, contributed a total of $130 million in equity to invest in both stabilized retail assets and new acquisitions.
PGGM currently has invested $22 billion in real estate globally, divided evenly between listed companies and private funds. About 27 percent, or $3 billion, of its private real estate portfolio is invested in the US. PGGM has formed a small number of other private real estate joint ventures in the US but has said it is seeking to do more.