LaSalle Investment Management has partnered with US multifamily real estate investment trust UDR to create a $510m (€459m) joint venture.
NYSE-listed UDR will contribute a seed portfolio of four communities into the venture for a 51% stake in the 1,328 apartment homes portfolio, while also acting as asset manager. UDR will also receive approximately $250m in cash proceeds.
The seed assets are the Hawthorne Apartments in Seattle, Los Alisos at Mission Viejo in Orange County, the Lodge at Ames Pond in Boston and the Signal Hill Apartments in Washington DC.
The joint venture, which will initially have no debt, is expected to grow over time through the acquisition of “high-quality, well-located communities with operational upside”.
Tom Toomey, UDR’s chairman and CEO, said: “The venture validates the success of UDR’s operating platform, innovation and unique value-creation mechanisms, which have led to the highest controllable operating margin among our peer group and earnings per share growth that is consistently above the peer average.
“Additionally, the venture expands UDR’s strategy of diversifying among capital sources that provide the company the ability to execute accretive investment opportunities across economic and market cycles.”
Mark Gabbay, global CEO of LaSalle, said: “We are pleased to have sourced a high-quality investment for our limited partner, alongside a best-in-class sponsor and operator in UDR.
“The US multifamily market has remained one of the top-performing and most resilient asset classes in recent years, and we look forward to expanding this portfolio with UDR in the years ahead.”
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