CHICAGO—Waterton Associates, headquartered here, has paired up with the US subsidiaries of two overseas insurers on a venture to acquire core and core-plus multifamily properties in key markets. The partnership between Waterton, Allianz Real Estate of America and Clal Insurance intends to buy up to $800 million of apartments.

The new strategy will focus on well-located, urban and suburban infill opportunities of $50 million or more, with an initial focus on the Boston, Chicago, New York City metro, Northern California and Washington, DC markets. Waterton will spearhead the sourcing and execution of the deals and will manage the properties, with a view toward longer-term hold periods.

“We see growing opportunity in the core multifamily space and it is complementary to our flagship value-add multifamily strategy,” says David Schwartz, Waterton's co-founder and CEO. The real estate investment firm currently holds about 18,000 apartment units in its portfolio.

“Clal is building a sizeable portfolio of institutional-quality assets in major metropolitan markets within the US,” says Tamir Kazaz, CEO of New York City-based Clal US Management, the wholly owned subsidiary of Clal Insurance that was launched in 2013. “We see immense potential in partnering with reputable and experienced companies such as Allianz and Waterton Associates.”

Allianz Real Estate of America's CEO, Christoph Donner, says the venture allows Allianz to increase its long-term exposure to the US multifamily market as well as expand our network of strategic co-investment partners.” Last month, Commercial Mortgage Alert ranked the New York City-based Allianz subsidiary in the top 10 of US commercial mortgage originators for the first time.

The venture between Waterton, Munich-based Allianz and Tel Aviv-based Clal continues two broad-based themes underpinning US commercial real estate: multifamily's leadership position among asset classes for investment sales, and the influx of foreign capital. Apartments were just edged out by office in the first quarter of this year, according to Real Capital Analytics, with $33 billion worth of significant multifamily deals compared to $33.5 billion in the office sector. Overseas buyers have spent $28.5 billion year to date on commercial properties in this country, according to RCA.