Round Hill Capital has entered the US real estate market via a new partnership with Atlanta-based multifamily firm Cortland, PERE has learned.
The partnership will pursue an income and growth strategy that will provide predominantly European investors with access to the US multifamily sector. Round Hill has kicked off the joint venture with the acquisition of The Exchange at North Haven, a 411-unit suburban apartment community in Atlanta. Terms of the deal were not disclosed.
The firm’s principals, including founder and chief executive Michael Bickford and head of Americas Rob Reiskin, previously have invested in the US using personal capital. However, The Exchange at North Haven represents Round Hill’s first US investment.
Round Hill will lead the investment management activities of the partnership, while Cortland will oversee the joint venture’s community and day-to-day operations.
Round Hill, which was founded in 2002, currently manages more than $6 billion of assets across approximately 65,000 residential units and student housing beds in eight European countries, including Germany, the Netherlands, the Czech Republic and Finland. The firm’s multiple investment strategies include acquisitions of existing assets, development of new purpose-built properties, forward-purchases and repositionings.
For Round Hill’s investors, the new US partnership “is a risk-reduced way to cross the Atlantic with local support provided by a trusted investment manager,” said Rob Reiskin. “We’re a well-known multifamily investor with a deep appreciation for what European investors are seeking in their investment managers.”
In its debut in the US, Round Hill took a different approach than its prior investments in its home region. “Unlike Europe, where we’ve been active for well over a decade and are vertically integrated, our staffing levels in the States are still growing,” Reiskin said. “Many sectors are becoming priced for perfection, so we will take a measured approach to building our footprint in US. Rather than rapidly adding staff, we are aligning ourselves with a best in class operating partner.”
Round Hill’s initial strategy, which will primarily target European investors, will give it exclusivity over four assets totaling more than 2,000 apartments although the firm can raise incremental capital for subsequent investments.
“We see a significant amount of deal flow in the mid-risk, mid-return zone which seems to lack the weight of capital that exists in the core and value added / opportunistic segments,” Reiskin said.
In the US, the firm will initially primarily focus on the Southeast, which offers attractive risk-adjusted returns, he added. Cities such as Atlanta; Dallas; Charlotte, North Carolina; and Orlando, Florida are seeing outsized growth in population, jobs and rental rates, Reiskin said. “We’re big believers in the long-term growth of the Southeast. There are plenty of high quality, recently renovated garden-style apartments that we are able to acquire at a discount to replacement cost. This attractive entry pricing provides our investors with downside protection.”