Atlas Residential announced it will deploy $1 billion through its affiliate Atlas Residential Holdings (Hong Kong) Limited in the establishment of a first ever global multifamily apartment portfolio via its discretionary private opportunity fund.
The targeted portfolio will consist of several thousand existing Atlas units and newly acquired value-add and development properties throughout the United States, the United Kingdom and mainland China.
The portfolio will be allocated 65 percent US, 20 percent China and 15 percent UK, targeting value-add acquisitions or developments primarily in job and population centers.
Assets will be strategically located in geographically-diverse markets using Atlas’ US rental apartment management model to establish US accepted institutional sector practices and asset class globally.
The portfolio will provide substantial income and value growth potential via a value-add renovation for existing properties and strategic development where no suitable assets exist.
Returns will be enhanced with permitted leverage up to 70 percent LTV on existing or stabilized assets and up to 60 perc ent LTC for development or re-development projects.
“We want to blend the stability and continued growth of US multi-family assets with what we are seeing as coming sector distress in the UK with Brexit and in China with US trade war effects and government policy forcing developers to shift to rental development.” said Atlas CEO, Steven Ivankovich.
In China, Atlas is working with developers who are struggling to sell units and are being forced to build properties exclusively for rent with the recent change in government policy toward housing.
“We are seeing significant distress and ‘deer in headlight’ effect as builders and developers just don’t know what to do when it comes to rental apartments,” said Shanghai based Atlas China managing director Patrick Kelly.
“I have been living and working in the Chinese property sector for 20 years and see huge opportunity and a long-term competitive advantage for Atlas here.”
Hong Kong based Blackwell Global advised Atlas in the structuring and formation of the investment vehicle.
Privately owned and headquartered in Chicago, with offices in Dallas and London, Atlas has been investing in and managing rental apartment homes for over 20 years and has completed over $450 million in renovations across 350 communities.
The current US portfolio comprises more than 18,000 units across 13 states with a transactional value of approximately $1.3 billion.