Dutch pension group APG, Canadian pension fund subsidiary Ivanhoé Cambridge and Singapore’s sovereign wealth fund GIC are cornerstone investors in a new residential fund that is acquiring a listed company for $3bn (€2.65bn).
Fund manager Greystar Real Estate Partners said it is buying Monogram Residential Trust, a listed owner of luxury apartment communities in the US.
The acquisition of the company, whose assets are understood to have gross asset value of $4.4bn, will seed its new perpetual-life fund.
The Greystar Growth and Income Fund is intended to be the leading open-ended multifamily property fund in the US.
Greystar will also acquire Monogram’s share of two separate joint ventures with Dutch pension fund investor PGGM and the National Pension Service (NPS) of Korea.
The joint venture with PGGM is being restructured, Greystar said. IPE Real Estate understands that NPS will be selling its share of its joint venture to Greystar.
The merger was unanimously approved by Monogram’s board of directors. The company’s stockholders will receive $12 per share in cash.
Bob Faith, founder, chairman and chief executive of Greystar, described Monogram’s portfolio as “high quality assets in some of the best markets in the country”.
He said they would seed “our flagship, core-plus, perpetual-life vehicle”.
Greystar pioneered the institutional investment in the US multifamily market. In recent years it has been expanding internationally and today manages 415,000 units valued at $80bn across 140 countries.
In a letter to investors, seen by IPE Real Estate, Greystar said the new fund, which has a core-plus risk profile, will not “overlap with existing development or value-add strategies”.
In the latest edition of IPE Real Estate, Faith said: “We have discovered that many global institutional investors love the lower volatility of the rental residential asset class.
“Combined with increasing urbanisation and demand for flexibility, we are seeing an enormous global opportunity for apartments. What these potential investors do not have is a developer, operator and investment manager to help them invest across the globe.”
