Nuveen believes the demand for apartments will continue to shoot up
Nuveen Real Estate has launched its US Cities Multifamily Fund in pursuit of acquiring multifamily rental properties.
The fund is designed to acquire and manage institutional-quality multifamily rental properties in exclusive cities nationwide. A $450 million capital commitment and seed portfolio from a third-party investor pinned the first close, alongside a $100 million co-investment from TIAA, Nuveen Real estate’s parent company.
“As investors look to commercial real estate for income and diversification, we are well-positioned to build an attractive portfolio of apartment assets that reflect the dynamic and stable growth attributes of this sector,” said James Martha, Nuveen Real Estate’s head of US housing. “We have over six decades of experience investing in the multifamily sector and have established a strong platform to match client capital with investment opportunities that respond to modern living needs.”
The fund targeted millennials and middle-income households (MiMis) who are “renters by necessity rather than choice,” Nuveen said. It sought to acquire properties with steep, stable occupancy levels located in select cities and prime growth markets across the US. The fund launched a portfolio of nine assets that consist of properties stretching over eight core markets and adding up to more than 3,000 units.
Nuveen’s latest research report, “THINK US: Investing in the MiMis”, said that MiMis would continue to push demand for apartments in the coming decade.
“Millennials and middle-income households represent a stable and sustainable long-term source of demand for apartments, and Nuveen Real Estate believes this demand will continue to keep occupancy rates strong, particularly in metro areas benefiting from job growth and an expanding economy,” said Nikita Rao, portfolio manager of the fund.
As of Dec. 31, the US direct multifamily residential equity and mortgage debt investments of Nuveen Real Estate were valued at over $17 billion.
