The platform will develop and hold for-rent residential assets in US gateway cities
A Sydney-based construction, property, and infrastructure company has teamed up with an Australian superannuation fund on a $2 billion multifamily investment vehicle to develop and hold for-rent residential assets in US gateway cities.
Lendlease and First State Super have each committed US$500 million in equity to the new vehicle. Together, they plant to create a portfolio of geographically diverse multifamily assets across the gateway cities of New York, Chicago, Boston, San Francisco, and Los Angeles.
Under the partnership, Lendlease will serve as the platform’s development, construction, and investment manager. Two existing Lendlease multifamily projects will be used to seed the vehicle. The projects have a value of more than $400 million and are currently being completed in Chicago and Boston.
“This new multifamily investment vehicle is consistent with our strategy of leveraging Lendlease’s integrated property capabilities to deliver high-quality urban regeneration projects that enhance people’s lives while simultaneously creating value for our shareholders and partners,” Lendlease Americas CEO Denis Hickey said.
Lendlease noted that the US multifamily sector is valued at more than US$3 trillion, with returns higher and less volatile compared to most major US real estate sectors through the last 25 years. Additionally, there has been a major shift to renting over the past 10 years, which saw the creation of more than six million renter households.
“Over the past few years, First State Super has proactively researched the multifamily sector domestically and in the US. We believe Lendlease is an excellent partner to execute on this strategy given their skill in delivering large urban regeneration projects coupled with their integrated business model,” said Damien Webb, First State Super head of income and real assets.
