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DALLAS-Behringer Harvard has the groundwork in place, including the team, to direct this year’s attention to assembling a class A portfolio of multifamily properties in the US. Part of the plan can be discussed; some topics are off limits due to SEC regulations.

Until the Dallas-based investment group unleashes its multifamily fund to the market, its leaders can only discuss the strategy, stresses M. Jason Mattox, Behringer Harvard’s executive vice president. He tells GlobeSt.com that class A multifamily assets “will be a large part of our acquisition focus in 2007.”

The plan is to buy ground-up and existing developments of garden-style, high-rise and student-housing units, with scouts looking particularly hard at condo projects that now are destined for the nation’s renter pool. “I believe we can uncover some great deals in the multifamily sector,” Mattox says. “It’s a great time to buy on a pound-for-pound basis.” Not only does the sagging condo market provide acquisition opportunities, but the rising population of 20- and 30-something professionals in the renters’ pool is too significant to be ignored from an investment standpoint, he explains.

For now, deals will be funneled through the Behringer Harvard Opportunity REIT I Inc., which just inked $14.2 million in mezz loans for Toronto-based Brookfield Real Estate Opportunity Fund and Phoenix Property Co. of Dallas. The deal is a door-opener to a buy-in and portfolio pipeline. “We obviously have a strong relationship. We would like to think that this is an opportunity we can do again,” Mattox says, careful to couch the statement since nothing else has been announced.

The Brookfield-Phoenix deal was the REIT’s second mezz financing since October 2006 for multifamily projects. Mattox says it’s not been decided if the 2006 investments upon completion also will roll into a joint venture pool. “We may become the sole owner or they could go to market,” he says. But, there’s ample time to decide because one delivers at the end of this year and the other isn’t due to come on line until first quarter 2008.

The Behringer Harvard-funded projects are being developed by Atlanta-based Trammell Crow Residential. The REIT provided $9.7 million for the 213-unit Alexan Black Mountain in Henderson, NV and $13 million for the 376-unit Alexan Voss on 5.8 acres along South Voss Road in Houston’s Galleria submarket. The Henderson project will deliver at the end of the year on an 11-acre tract at the junction of Interstate 515 and Nevada State Drive at the doorstep to Nevada State College, where student housing isn’t set to come on line until 2016.

Mattox says the team that’s been assembled in the past seven months will be looking at major markets in the US, particularly the Sunbelt. The typical garden-style deal most likely will be $30 million to $50 million, but he says the REIT’s checkbook is open to high-rise buys, which comes at a considerably higher tab. According to Mattox, there is no pre-set limit in terms of units or expenditure.

Last September, Mark Alfieri was named senior vice president, leaving Chicago-based Amli Residential Trust so he could build Behringer Harvard’s multifamily team. Recently, Robert T. Poynter was hired as a vice president after 20 years with Irving, TX-based JPI. Rob Hodge also was hired last year as an analyst and more are coming on board, according to Mattox.

Although the multifamily sector has the REIT’s eye right now, Mattox stresses that the team isn’t turning its back on other investment arenas. “We will continue to look for other opportunities as before,” he says, “but this property class has strong growth potential. If condo converters are exiting the market, it appears cap rates will trend up for both development and existing product. We think the timing is right for increasing our presence in multifamily.”

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