BentallGreenOak is seeking to boost the residential exposure of its $10bn (€8.47bn) core real estate fund by entering a strategic partnership with White Oak Partners.
The investment manager’s open-ended US Core Fund has committed $400m to the partnership which, with leverage and equity from White Oak, is intended to acquire more than $1bn of multifamily assets.
White Oak specialises in apartments in the southeast and Texas regions, and the partnership will enable BentallGreenOak’s fund to expand and diversify its residential holdings.
Mike Keating, the fund’s portfolio manager, told IPE Real Assets: “Previous to this relationship, most of our apartment assets in the fund had been along the two coasts from Washington DC to Boston and Los Angeles to Seattle.
“We did have a little bit of exposure in the Raleigh Durham region. Our long-term plans are to have 10% of our apartment exposure be in the southeast.”
The partnership will start by recapitalising two assets already owned by White Oak in the metropolitan areas of Tampa and Nashville. Two other transactions are under contract but no details were disclosed.
It will focus on core and core-plus properties with 250 to 450 units, ranging in value from $60m to $100m.
There is growing competition among investors for multifamily assets in the southeast US due to strong fundamentals.
Kevin Rivest, managing director of investments at BentallGreenOak, said: “We do recognise all of the capital chasing deals in the region, but we also believe that White Oak Partners is a best-in-class partner and the markets they are in show strong growth patterns going forward.”
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