IRVINE, CA-Steadfast REIT Investments LLC, an affiliate of locally based Steadfast Cos., has launched a $1.65 billion IPO for a nontraded REIT called Steadfast Income REIT Inc. that will focus primarily on acquiring and operating multifamily and industrial properties. These will include stabilized, income-producing and value-added properties, according to filings by the REIT and a news release issued on Tuesday.

The new REIT expects that multifamily properties will compose between 55% and 75% of the aggregate cost of its portfolio to after it has invested substantially all of its offering proceeds, according to its prospectus. It expects industrial properties will compose between 20% and 30% of the aggregate cost of the portfolio.

The head of the new REIT is Rod Emery, the founder of Steadfast Cos., who serves as the chairman, CEO and president of Steadfast Income REIT. Before founding Steadfast in 1994, Emery served for 17 years as the president of Cove Properties, a property-management, construction and development firm specializing in industrial properties.

The new REIT's prospectus cites research suggesting that the multifamily market is likely to post positive gains over the next several years as the US economy recovers. The prospectus says that although the apartment market today remains in contraction because of the economic downturn, ""We anticipate that a cyclical upturn in the economy, increased employment rates, favorable demographic trends, increases in immigration rates, stabilization in the housing market and a modest new apartment supply will significantly improve apartment market fundamentals and performance." It says that the expected increase in demand for apartments and the continued downward pressure on pricing "presents attractive near-term and longer term investment opportunities in the multifamily sector."

Regarding the industrial sector, the REIT's prospectus says that it "may be ready to post a strong recovery due to the high correlation between growth in the gross domestic product and demand for industrial space." The industrial sector "is closely correlated with GDP growth and therefore is likely to experience recovery ahead of other real estate sectors such as office and retail," the prospectus states.

The new REIT is offering up to $1.5 billion in shares of its common stock for sale at $10 per share and up to an additional $150 million in shares of its common stock under its distribution reinvestment plan at $9.50 per share, typical pricing under the nontraded REIT structure. Steadfast Capital Markets Group, the securities and financial services division of Steadfast Cos., is the dealer manager and will distribute the REIT shares through retail broker-dealers and investment advisers.