The Related Group of Miami, best known for developing luxury condominiums and homes, said Tuesday it will invest as much as $2 billion in value-add multifamily properties over the next numerous years.
The privately-held company is partnering with Boston-based Rockpoint Group on the endeavor, which will concentrate on multifamily properties in Florida. However the firms likewise plan to purchase homes in Atlanta, Dallas, Phoenix and other Sun Belt markets.
Related stated the brand-new department, which will concentrate on value-add investing– buying a property, renovating it, raising leas and costing an earnings– belongs to a national growth that extends the business’s multifamily operations to the Southwest.
Related has tapped Chief Operating Officer Matt Allen to deal with Michael Hammon on obtaining, remodeling and managing a portfolio of value-add complexes. Hammon, a previous Related vice president, rejoined the company June 1 as a senior vice president after 15 years with different other real estate companies.
Related is looking for residential or commercial properties now and anticipates to purchase some by the third quarter of this year, Hammon said.
With a credibility for developing classy apartments and apartment or condos, Related describes itself in marketing materials as a “leading developer of sophisticated metropolitan living.”
However the company has actually remained in the affordable-housing sector structure Area 8 and rent-capped units because its inception in 1979. Simply given that 2010, the business has constructed 26 affordable-housing jobs valued at about $456 million. It expects to deliver six more by next year.
Hammon said Allen and Associated founder Jorge Perez are regularly approached by industry executives, asking why the business isn’t really in the value-add market.
” Jorge is a company believer in buying multifamily real estate in the U.S.,” Hammon told CoStar News. “He thinks it’s going to be an excellent market in the brief run and the long term.”
Jack Winston, a longtime structure specialist in Miami, stated the value-add sector is a natural suitable for Related.
” They already have the experience in apartment or condos,” Winston said. “And the thing is, apartment or condo building and construction is getting too pricey to build brand-new, with land and labor costs going up. They can buy the per-unit more affordable than they can develop it. So it’s a sensible next action.”
Editor’s Note: This news story was updated from an earlier variation to include additional info on the brand-new investment partnership and the properties it will target.