CASA Partners VI to Target $420 million Value-Add Apartment Portfolio
New York, NY and Hartford, CT, September 18, 2014 – TTIAA-CREF and TIAA Henderson Real Estate ("TH Real Estate") today announced that CASA Partners VI, L.P. ("CASA VI"), the sixth in a series of multi-family housing funds, had its final close after raising $260 million in equity from investors. With leverage, the equity commitments will allow the Fund to target a portfolio of approximately $420 million.
CASA VI, the latest fund to close in the established CASA series of funds, is focused primarily on U.S. workforce housing and seeks to provide its investors enhanced returns with high sustainable income. The portfolio team for the CASA funds has a track record exceeding 20 years and manages $2.2 billion in apartment assets with more than 18,850 units across 26 U.S. markets (as of June 30, 2014).
"This is apartment investing with a difference," said Jay Martha, Managing Director of North American Real Estate for TIAA-CREF Asset Management. "The CASA strategy takes an integrated approach, combining multiple value-enhancing investment strategies with income-enhancing, low-cost specialty bond financing to meet its goals."
Since its initial close, the CASA VI portfolio has acquired two properties, each financed through municipal bonds that are exempt from federal, and in some instances, state income tax in exchange for providing affordable workforce housing to communities. Tax-exempt bonds are issued for the development or rehabilitation of market rate housing. This debt strategy provides below market leverage for the fund, which supports enhanced income returns for the investors.
The two properties acquired for the CASA VI portfolio to date are:
Since inception in December 1993, the CASA Series has executed on more than $3 billion in apartment transactions and successfully implemented diverse value-add investment strategies over multiple market cycles.
TIAA Henderson Real Estate Limited (TH Real Estate) is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA) and Henderson Global Investors. TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or TIAA-CREF Alternatives Advisors, LLC, a registered investment advisor and wholly owned subsidiary of TIAA, and distributed by Teachers Personal Investors Services, Inc., member FINRA.
Tax-Exempt Bond Financing
Tax-exempt bond financing for apartments arose out of the desire of municipalities to foster home building targeted at middle-income residents. The local government issues tax-exempt bonds in order to provide below-market financing for such developments. In return, housing developers agree to set aside a certain percentage of units for renters with incomes below a ceiling that is based on the median income for that area.
These developments typically share the same physical characteristics and amenities as other core apartment properties and are often indistinguishable from neighboring multifamily housing communities. When a developer sells the property, the bonds and the unit set-asides remain with the asset.
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $613 billion in total assets under management (as of 6/30/2014) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
TIAA-CREF's global real estate platform provides access to capabilities across every aspect of real estate investing, including directly owned property, equity securities and private debt. The platform leverages over six decades of direct real estate investing in the U.S. and is one of the largest managers of U.S. tax-exempt real estate assets.i
TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit www.tiaa-cref.org for details.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
TIAA Henderson Real Estate (TH Real Estate) is an established investment management company with specialization in real estate equity and debt investing worldwide. As one of the largest real estate managers in the world, TH Real Estate has the scale, capital resources and knowledge to provide creative and effective real estate investment solutions for clients. With a focus on the retail, office, logistics, debt and multi-family sectors, TH Real Estate emphasizes sustainable practices to protect assets and maximize their value.
Launched in April 2014, the company has a dedicated global presence with offices across Asia and Europe, managing $25.5 billion of real estate assets across 50 funds and mandates.
Together, the TIAA-CREF real estate and TH Real Estate platforms represent one of the largest real estate investment management enterprises in the world, with a combined total of $77 billion in real estate assets under management.
The CASA team was part of TIAA-CREF's acquisition of Henderson Global Investors North America Inc.’s property business in April 2014, which is now a separate but complementary business within the TIAA-CREF Asset Management organization. The senior CASA portfolio managers have worked together for over 20 years, since the inception of the first CASA fund in 1993, and have an average of over 30 years of real estate investment experience.
i Source: Pensions & Investments, October 2013. Rankings are based on data provided as of June 30, 2013, by each responding asset manager.