Nuveen Real Estate, one of the largest real estate investment managers in the world, has launched a multifamily fund with a $550 million purse targeted at institutional quality rentals.
The U.S. Cities Multifamily Fund is an open-end perpetual life real estate investment vehicle. The first close is anchored by a $450 million capital commitment and seed portfolio from a third party investor, alongside a $100 million co-investment from Nuveen Real Estate’s parent company, TIAA.
“As investors look to commercial real estate for income and diversification, we are well-positioned to build an attractive portfolio of apartment assets that reflect the dynamic and stable growth attributes of this sector,” said James Martha, Head of U.S. Housing, Nuveen Real Estate.
The Fund seeks to acquire well-located properties with high, stable occupancy levels located in top-tier cities and select growth markets across the U.S. It has a primary focus on high-quality assets that appeal to the largest base of renters: Millennials and middle-income households (MiMis) who are renters by necessity rather than by choice.
The Fund launched with a portfolio of nine assets comprised of Class A and B properties spanning eight core markets and totaling more than 3,000 units.
According to its latest research, THINK US: Investing in the MiMis, Nuveen Real Estate believes that MiMis will continue to drive demand for apartments in the coming decade as their contribution to the U.S. economy continues to grow.
“Millennials and middle-income households represent a stable and sustainable long-term source of demand for apartments, and Nuveen Real Estate believes this demand will continue to keep occupancy rates strong, particularly in metro areas benefiting from job growth and an expanding economy,” said Nikita Rao, Portfolio Manager of the Fund.
Nuveen Real Estate’s U.S. direct multifamily residential equity and mortgage debt investments are valued at over $17 billion . The portfolio is comprised of 245 investments across 50 markets and multiple sub-sector types, including Class A, Class B, luxury, workforce housing and specialty demand properties, such as student and senior housing.
Added Rao, “We believe that our specialized investment teams, decades of experience, local market knowledge and presence on the ground give us an advantage in terms of sourcing new opportunities in this dynamic sector. Our platform is well-positioned to provide institutional quality deal execution balanced with speed, flexibility, risk mitigation and accuracy.”