From left: Jean Michel and Rob Speyer

NEW YORK CITY—The Investment Management Corporation of Ontario and Tishman Speyer have formed a joint venture to create a portfolio of new developments and repositioned office and multifamily properties in major US gateway cities.

With IMCO's initial commitment of $500 million and additional co-investment opportunities of $250 million, IMCO and Tishman Speyer will jointly acquire and develop property in major supply-constrained US markets. Locations will include New York, Washington, Boston, Los Angeles, San Francisco, Chicago and Seattle. The joint venture will invest in new development opportunities and well-located office and multi-residential assets in need of renovation, and convert them into modern, Class A properties.

The program bolsters IMCO's goals of investing in high-quality assets and developing long-term and mutually beneficial strategic partnerships. For Tishman Speyer, it facilitates expansion in major US markets with value-add opportunities.   

"IMCO has partnered with Tishman Speyer to leverage its worldwide presence, as well as deep local market knowledge," says Jean Michel, chief investment officer, IMCO. "This partnership allows us to access larger transactions where few bidders can compete." He adds Tishman Speyer's consistent track record in project delivery makes them an ideal partner.

"Demand is very strong for high quality office space and multifamily housing in US gateway cities, and we believe that will be the case for the foreseeable future," says Tishman Speyer president and CEO Rob Speyer. "This alliance will help to fuel our ability to help meet that demand, working with a partner that is financially well positioned and experienced in successful investment."    

IMCO manages $63.3 billion of assets providing public-sector institutions with investment management services. It prefers to develop partnerships with full-service real estate organizations which provide competitive advantages such as market knowledge, deal accessibility, best-of-breed in-house expertise and strong reputations.

Based in New York, Tishman Speyer is active across 27 key global markets in the US, Latin America, Europe and Asia. The firm builds and manages office, residential and retail properties. They acquire, develop and operate a portfolio valued at approximately $94 billion across 411 assets.

The joint venture is targeting cities with supply constraints that will support higher rent growth. They opine development and value-add opportunities are economically attractive in the target markets with stabilized return on cost at significant spreads over existing cap rates on core assets.