(Read more on the multifamily market.)
DALLAS-In aligning as joint venture partners, Behringer Harvard and PGGM have built in flexibility to their agreement for the rapid deployment of $100 million in equity. The multifamily investment scope runs the full development gamut, including bail-out deals.
Behringer Harvard's been heavily investing this year in class A multifamily and new student housing, but it's uncertain if any acquisitions to date will be rolled to the JV, Jason Mattox, the Dallas-based investment group's executive vice president, tells GlobeSt.com. It's also open-ended as to which of the several Behringer funds will end up with the JV's deeds. There might even be more than one, he explains. "The PGGM agreement provides for a great deal of flexibility in the way that the money is invested," he says. Unless the strategy is altered, leveraged plays are destined to reel in about $400 million of real estate.
The JV will invest in individual high-end assets in various stages of development in leading US metros. "Each property we are looking at will have a different profile," Mattox says. "It's an ongoing JV pool to invest in assets that are near completion and that haven't achieved stabilization." The holding periods will vary with each acquisition, with decisions being made as developments come on line or stabilization is reached. Only reputable national and regional developers qualify for the tail-end funding, according to yesterday's press release.
The strategy does extend to see-throughs. "We are looking for excellent investment opportunities in the multifamily sector," Mattox says. "Those, where a developer doesn't have the money to finish--given Behringer Harvard's appetite--we would certainly find something like that attractive."
In keeping with Behringer Harvard's MO, Mattox can't say if the JV's placed any contracts as yet or speculate when the first deal will close. The buying pool doesn't have a shelf life and, as would be expected, it could be expanded. "Both parties are very positive on this sector," Mattox stresses. "And, the relationship is one that's growing."
The Behringer Harvard team not only will decide what to buy and when to sell, but also plans to provide property management services. Product, like the investment plan, runs the gamut from garden-style apartments to high rises.
Mark Alfieri, senior vice president for Behringer Harvard, says the mission is to acquire projects in which value can be added in some fashion. In addition to project completion or stabilization, he points out that adding or completing amenities to developments or combining assets for economies of scale could live up to the JV's investment test just like the more outright traditional buy-in.
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