Development in Cypress, Texas. Image courtesy of Crown Holdings Group
Crown Holdings Group will be acquiring and building workforce housing in the Southeast and Texas with funds from a $250 million joint venture with Stern Resources Inc.
Crown Holdings Group, which has invested about $1 billion in the Southeast over the past 10 years, will be expanding its multifamily portfolio with the JV investment and also deploying additional capital into its subsidiaries and additional development projects.
“The primary focus of the JV will be new developments, though that may change if market conditions change,” Meir Matana, Crown Holdings Group principal, told Multi-Housing News.
About 30 percent of the JV funds will be spent in the Atlanta MSA, where the privately-owned firm plans to build additional workforce housing. Another area of focus will be Houston, where the JV has started to make its first acquisition, a 276-unit multifamily property.
“The first investments will be in workforce housing in the Houston MSA, in areas which have an insufficient supply of workforce housing,” Matana said. “We believe there are very strong merits to investments in the Houston area and are planning to focus resources in that area for the time being.”
Matana said other acquisitions are expected shortly in the Houston area as well as in Melbourne, Fla., and Bradenton, Fla. The joint venture is also planning to invest the funds in residential and resort developments in Florida.
Asked if that meant the JV would be looking at hospitality or condominium developments that could be used as vacation rentals, Matana said funds could potentially be targeted for both uses “depending entirely on specific locations in Florida and market conditions.”
Noting that multifamily is among the most sought-after U.S. real estate investment opportunities, Crown Holdings Group said in a prepared statement the joint venture will represent a lower risk to investors. The firm stated multifamily as an asset class is in increasing demand by U.S. and international investors “who wish to preserve their wealth while making a safe return.”
Hartadinata Harianto, head of Stern Resources Private Capital Group, said in prepared remarks the joint venture with Crown Holdings Group “fits seamlessly with Stern Resources’ strategy of partnering with talented investment companies and management teams in assets that when developed, are stable, well positioned in attractive markets and poised for continued growth.”
Since its inception, Crown Holdings Group has acquired 37 multifamily projects totaling 11,800 units; eight mixed-use properties with 7.5 million buildable square feet; 2,000 residential lots and 20 retail shopping centers with more than 2.5 million square feet of leaseable area.
In November 2019, a Crown Holdings Group affiliate Marquis Investments received a $25.5 million Fannie Mae DUS loan to refinance Woodgate Apartments, a 257-unit community in the Atlanta suburb of Chamblee, Ga. Marquis Investments acquired the asset in 2017 for $20.7 million.