Canada Pension Plan Investment Board (CPPIB) has further expanded its U.S.-based multifamily portfolio with more than US$330 million in equity investments in the past year. Recent activity has focused on six Class-A multifamily developments in California, Georgia and Massachusetts with a gross asset value of approximately US$740 million. CPPIB’s multifamily portfolio now comprises direct joint venture interests in more than 8,400 units in eight U.S. markets. Since 2011, CPPIB’s equity commitments in the sector have totaled US$1.3 billion, representing a gross asset value of US$4.5 billion at full ownership share.
Canada Pension Plan Investment Board Further Expands U.S. Multifamily Portfolio
Commits Additional US$330 Million to Six Multifamily Properties
TORONTO, ONTARIO–(Marketwired – Aug. 8, 2014) – Canada Pension Plan Investment Board (CPPIB) announced today the further expansion of its multifamily portfolio in the U.S. Over the past year, CPPIB has made equity commitments totalling over US$330 million in six Class-A multifamily developments in California, Georgia and Massachusetts. The developments will be luxury rental properties when completed and represent a gross asset value of approximately US$740 million and over 2,200 residential units.
“These high-quality properties align well with our multifamily strategy to acquire or develop investments in core U.S. markets typically with high barriers to entry,” said Peter Ballon, Vice-President & Head of Real Estate Investments – Americas, CPPIB. “We do this alongside top-tier, well-capitalized joint venture partners and developers and look forward to further growing our existing partnerships in this sector as we continue to expand our portfolio.”
The six multifamily developments are:
•Completed two transactions alongside existing joint venture partner Essex Property Trust: ◦45% interest in the Pleasanton BART development for an equity commitment of US$77 million. Pleasanton is a planned 506-unit multifamily community located in Pleasanton, California in the San Francisco Bay area.
◦US$39 million commitment to develop Phase III of the Essex Epic development in San Jose, California. Phase III will be a 200-unit residential development adjacent to our existing Phase I and II holdings.
•Expanded CPPIB’s joint venture platform with AMLI Residential with 45% interests in two residential development projects in Atlanta, Georgia – AMLI Arts Center in Midtown and AMLI CityPlace in Buckhead. CPPIB’s equity commitment totals $117 million in the two developments, which will have approximately 1,000 units when completed.
•Committed approximately US$90 million to acquire a 44% interest in the Block 6 development alongside joint venture partners Multi-Employer Property Trust (MEPT) and Chicago-based developer Golub & Company. Block 6 is a Class-A, 409-unit residential development in San Francisco, California.
•Committed US$11 million to develop and hold the Avalon North Point Lofts multifamily development in partnership with existing partners, AvalonBay and Allianz. Located in Cambridge, Massachusetts, Avalon North Point Lofts is a 103-unit residential development.
CPPIB’s multifamily portfolio now comprises direct joint venture interests in over 8,400 units in eight U.S. markets, assembled since we began investing in this sector in 2011. To date, CPPIB’s equity commitments in this sector total US$1.3 billion, representing a gross asset value of US$4.5 billion at full ownership share.
“U.S. multifamily investments remain an attractive sector for CPPIB,” added Mr. Ballon. “We believe that the limited supply of high-quality rental properties and other broad demographic trends such as forecast population growth, declining home ownership and the echo-boom generation reaching peak rental propensity all support continued growth in this sector.”
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, New York City and São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2014, the CPP Fund totalled C$219.1 billion. For more information about CPPIB, please visit www.cppib.com.
Canada Pension Plan Investment Board
Director, Global Corporate Communications
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