US real estate investor Dune Real Estate Partners has teamed up with developer TF Cornerstone to launch a $1bn (€953m) venture focused on office-to-residential conversions.
The two firms have created the Alta Residential venture to capitalise on “the scale of the distress in office real estate together with the unmet demand for housing in the US”.
Alta plans to focus on transit-oriented residential neighbourhoods in high-barrier-to-entry locations, with initial target cities including New York City, Washington DC, Boston, Charlotte, Raleigh, Atlanta, Dallas, San Francisco and Los Angeles.
Dune and New York City-based TF Cornerstone will identify and evaluate conversion opportunities for Alta and oversee construction through local developer partnerships.
Thomas Elghanayan, CEO of TFC Cornerstone, said: “Alta is well-positioned to respond to the current market bringing together Dune’s extensive experience in opportunistic investing during periods of real estate capital markets dislocation together with TF Cornerstone’s unique conversion experience and development capabilities.
“Given the need for owners of underperforming office assets to reevaluate the highest and best use of their properties, combined with ever-increasing need for new housing, we are confident that we’ll be able to scale Alta very quickly.”
Dan Neidich, CEO of Dune Real Estate Partners, said: “Investors have reacted very positively to Alta as a means to access high quality urban residential, and we have already received significant interest from a wide range of investors.
“The value proposition created by Alta is exciting in that it represents an opportunity at a national scale; has the potential to deliver compelling investment returns; supports the critical need to create new housing; and advances economic revitalisation and sustainability. Each of these categories individually are very attractive to investors – and Alta combines all four.”
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