CapitaLand Buys US Apartment Portfolio For $835M
The 3,787-unit, Class B portfolio is located around Seattle, Portland, Los Angeles and Denver.
SINGAPORE–CapitaLand International has acquired a portfolio of 16 multifamily properties in the US for $835 million, or $220,000 per unit–the group’s first investment in the US multifamily asset class. The 3,787-unit, Class B portfolio is located in suburban communities around Seattle, Portland, Los Angeles and Denver. CapitaLand sees the acquisition as a value add play and plans to refurbish the portfolio in phases over the next few years.
“The stable, reliable cash flows of these Class B multifamily properties make this suburban portfolio more attractive than the higher-priced urban core segment,” Gerald Yong, CEO of CapitaLand International, said in a prepared statement.
The garden-style and low-rise properties have an average occupancy of 90%, with average length of stay of about two years. Tenants tend to be a diverse mix of middle-income and skilled professionals working at such companies as Boeing, Microsoft, Starbucks, Amazon and Nike, CapitaLand says.
A Possible Spinoff One Day
The acquisition diversifies CapitaLand’s global investment portfolio outside of its two core markets of Singapore and China, said Lee Chee Koon, president and group CEO of CapitaLand Group, in a prepared statement. “It also enables us to diversify our investment property portfolio into developed markets as we continue to scale up our presence in our core emerging markets of China and Vietnam.”
The company plans to add value to the US portfolio it just acquired, he also said and added that it will “also be looking out for more opportunities to build up a sizeable platform and strengthen our expertise in this asset class. As the portfolio grows, we will have the option to spin off these assets into investment vehicles and partnerships.”
CapitaLand in the US
CapitaLand first entered the US market in August 2015 and has an office in New York to oversee the group’s investments and to build up its market expertise and capabilities in the country. Through Ascott and its real estate investment trust, Ascott Residence Trust, the company has acquired five properties with over 1,260 units in Manhattan, New York and Silicon Valley. On top of its portfolio of hotels in the US, Ascott also owns a majority stake in Synergy Global Housing, which offers apartments for corporate lease. Synergy has close to 1,500 units in the US, including Los Angeles, Orange County, San Diego, Seattle as well as New York.
Its latest multifamily portfolio acquisition will more than double CapitaLand Group’s investment in the US to over $1.5 billion.
Separately, this deal follows on the heels of another Singaporean company making a portfolio acquisition in the US: Ascendas-Singbridge Group’s purchase of a portfolio of 33 office properties in the US. The portfolio, which has a total net lettable area of 3.3 million square feet, is located in Portland, Raleigh and San Diego.