The Canada Pension Plan Investment Board (CPPIB) is expanding its portfolio of multifamily real estate properties in the United States.
It has committed an additional US$330 million ($361.9 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 ($811.6 million) and more than 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,” says Peter Ballon, vice-president and head of real estate investments—Americas with the CPPIB.
It makes these investments alongside top-tier, well-capitalized joint venture partners and developers, he adds.
The CPPIB’s multifamily portfolio now comprises direct joint venture interests in over 8,400 units in eight U.S. markets, assembled since it began investing in this sector in 2011.
To date, its equity commitments in the sector total US$1.3 billion ($1.43 billion), representing a gross asset value of US$4.5 billion ($4.94 billion) at full ownership share.
“U.S. multifamily investments remain an attractive sector for CPPIB,” Ballon explains. “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.”
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