PREI to sell first Mexican multifamily portfolio

The real estate investment manager’s offering marks the first potential trade of an institutional multifamily portfolio in the country.

Prudential Real Estate Investors Latin America is exploring the potential sale of a portfolio of Class A multifamily properties in Mexico. If sold, the portfolio would be the first such pool of professionally managed apartment assets to trade in the Latin American country.

The portfolio comprises six properties with a total of 2,125 units, more than 33,000 square meters, or 355,209 square feet, of retail space, and approximately 14,000 square meters, or 150,695 square feet, of Class A office space. The assets consist of the Vyve Lago Alberto, Vyve Santa Fe and Vyve Mitikah in Mexico City; and Latitud, La Capital and Garza Sada 1892.

The properties have been developed in the past 12 to 36 months, and include additional development rights. Most of the buildings have occupancies of more than 90 percent, while some of the more recently completed properties currently are more than 80 percent occupied. The overall portfolio occupancy level is expected to exceed 90 percent in early 2015.

PREI has hired CBRE Group to market the portfolio. However, PERE understands that the firm currently is testing the market in terms of investor interest and pricing rather than pursuing a definite sale of the assets. “This offering presents a rare opportunity to acquire professionally managed residential properties located in densely populated and highly sought-after areas in two of Mexico’s most important cities,” said Tim Gifford, senior vice president at CBRE Capital Markets, in a statement.

“Demand for such assets is expected to continue to outpace supply over the coming years in Mexico, and investors have the added opportunity to capitalize on the upside potential for higher rents as the product type becomes better known throughout the market,” added Gifford.

Each of the multifamily properties features studio, one-, and two-bedroom apartments. Retail tenants include Santander, DHL, Telcel, Copa Airlines, Oxxo, Círculo K, Sportsworld, and Farmacias Benavides, among others.