UDR, a leading multifamily REIT, has formed a new real estate joint venture with MetLife, UDR/MetLife II, wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 communities in the joint venture include seven from Denver-based UDR’s first joint venture with MetLife (UDR/MetLife I), which was formed on November 8, 2010, and five which have been newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are all recently developed, high-rise apartment buildings located on Manhattan’s Upper West Side, and were purchased for $630 million.
The acquisition of Columbus Square was partially funded through a combination of 10-year, fixed- and floating-rate debt totaling $302.3 million at an average rate of 3.8 percent from Fannie Mae. Approximately 88 percent of this amount is fixed at a rate of 3.9 percent. The new joint venture also assumed $363 million of debt associated with the seven communities contributed from the UDR/MetLife I joint venture. In total, the debt associated with the UDR/MetLife II joint venture carries a weighted average of 4.2 percent and a term of nine years.
The five communities that make up Columbus Square are: 801 Amsterdam, a 100-unit high-rise built in 2009 and 97 percent occupied; 775 Columbus, a 56-unit high-rise built in 2011 and 100 percent occupied; 795 Columbus, a 132-unit high-rise built in 2011 and 95.5 percent occupied; 805 Columbus, a 63-unit high-rise built in 2011 and 79.4 percent occupied; and 808 Columbus, a 359-unit high-rise built in 2009 and 97.5 percent occupied.
The seven communities contributed from UDR/MetLife I are:
Ashton Austin, a 259-unit high-rise in Austin, Texas, built in 2009, and 92.8 percent occupied; Ashton Bellevue, a 202-unit high-rise in Bellevue, Wash., built in 2009, and 95.1 percent occupied; TEN20, a 129-unit high-rise in Bellevue, Wash., built in 2009 and 91.9 percent occupied; Lodge at Foxborough, a 250-unit garden apartment complex in Foxborough, Mass., built in 2009 and 92.4 percent occupied; Lenox Farms, a 338-unit garden apartment complex in Braintree, Mass., built in 2009 and 96.1 percent occupied; Charles River Landing, a 350-unit mid-rise in Needham, Mass., built in 2010 and 98.1 percent occupied; and Domus, a 290-unit mid-rise in Philadelphia, Pa., built in 2008 and 98.3 percent occupied.
With the closing of UDR/MetLife II, UDR will own, have an ownership interest in or have undernine communities consisting of 2,626 homes in Manhattan, nine communities consisting of 2,721 homes in the Boston metro area and 14 communities consisting of 2,720 homes in the Seattle metro area.
“These latest transactions speak to the success of the first UDR/MetLife joint venture and the opportunities available to us to further grow our partnership with MetLife in the future,” Tom Toomey, president and CEO of UDR said in a statement. He noted that the joint venture’s ownership interests in high-quality apartment communities “were all acquired in off-market transactions.”
“This joint venture is in line with MetLife’s commercial real estatestrategy and also builds upon our strong relationship with UDR,” added Robert Merck, senior managing director and head of real estate investments for MetLife. He said that the joint venture will enable MetLife to increase its investment in “high-quality, multifamily properties in top-tier markets.”