Hansainvest Hanseatische Investment is creating a real estate special fund to invest in the US residential sector.
The fund – known as HANSA US Residential – has a target fund volume of $1bn (€890m), with equity of around $500m.
The distribution yield for investors is forecast at an annual 4.5%.
The fund manager will team up with Bell Partners, an apartment investment and management company focused on high-quality US multifamily communities.
Bell Partners, which has more than 60,000 units under management, is one of the largest apartment renovators in the US.
Nicholas Brinckmann, managing director at Hansainvest, said Bell Partners provided “great market access and the necessary all-round expertise in the multi-family houses segment”.
A Bell Partners investment entity will also co-invest in the fund.
“This,” Brinkmann said, “will enable us to be aligned and have common interests shared by the investors and our local partners.
“The positive development of the overall economic and demographic data provides a clear argument in the long term for investments in the US residential real estate market. This was what ultimately prompted us to decide to create a US fund.
“What’s more, the legal framework makes it possible to increase rent for residential real estate in the US at much more regular intervals than here in Germany. From the perspective of investors, this is a great benefit.”
The fund will invest in metropolitan areas with positive demographic and economic fundamentals.
The focus will be on residential properties with a volume of between $50m and $100m, including high-rise residential buildings, blocks of flats and apartment complexes with between 150 and 550 units.
Hansainvest intends to hold the properties after their purchase for at least 5-7 years.
The first properties are scheduled to be purchased this year.