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RICHMOND, VA-United Dominion Realty Trust has entered a joint venture agreement with Cedar Rapids, IA-based Aegon USA Realty Advisors Inc. to invest up to $210 million in multifamily development projects around the nation between now and 2005. Under the recently created arrangement, the majority of construction costs–anywhere from 70% to 80%–will be solicited from banking institutions. UDRT and Aegon will divide the remaining development expenses by providing 20% and 80% of that amount, respectively.

“This development venture is very similar to the successful program that we just concluded with Credit Suisse First Boston under which our company built five apartment communities with stabilized returns in the 9.8% to 10% range,” UDRT senior executive vice president and development head Mark Wallis explains in a statement. “This new program has the same benefits of a national operating platform combined with United Dominion’s development expertise and proven track record. Along with the announcement of the joint venture comes news of the partnership’s first development, a Houston apartment community that is scheduled to be available for leasing late next year. Copperfield Apartments will be developed for $29.2 million, with UDRT spearheading construction of the 504-unit complex.

As for where the remaining $180 million worth of development funds will go, UDRT and Aegon will rely on several factors to select potential building locations. “Our future site selections will be based on the availability of suitable land and the local outlook of supply vs. demand,” Aegon president Dave Blankenship shares with GlobeSt.com. “We do not make it a practice to use the size of a community as a litmus test. Developers with large amounts of capital to deploy, such as our joint venture with UDR, might find it more efficient to deploy capital in larger communities where there are more potential tenants to absorb new supply. While developers with less capital might optimize their results in smaller communities, where there is less competition from larger developers. With that in mind, our initial targeted markets include Dallas, Houston, San Francisco, Southern California, South Florida and Washington, DC.”

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