An Atlanta-based company is partnering with an arm of Prudential Financial Inc. (NYSE: PRU) in a $600 million investment in workforce housing in the Southeast.
The multifamily portfolio acquisitions in Raleigh-Durham, N.C., Ponte Vedra Beach, Fla., and Charleston, S.C., totaling nearly $600 million, are the fifth joint venture between Atlanta's Carroll Organization and PGIM Real Estate since December 2017.
The companies are investing in workforce housing, contrasting with other investors who have targeted the upscale multifamily market.
“These investments are based on our thesis that quality workforce housing is currently an underserved segment of the multifamily market, which has created a supply/demand imbalance when homeownership or new-supply rents in desirable locations may not be attainable for most Americans," M. Patrick Carroll, CEO of Carroll Organization, said in a statement. "The outlook for multifamily performance in the Raleigh-Durham, Jacksonville and Charleston markets remains strong going forward due to their diverse economies, business-friendly governments, job and population growth, and overall quality of life. We are thrilled to continue our positive momentum with PGIM Real Estate with these acquisitions and look forward to doing more business together in 2019.”
The five joint ventures by PGIM and Carroll have resulted in $2 billion in acquisitions across 45 properties and approximately 15,000 units throughout Florida, North Carolina, Tennessee, Texas, and South Carolina.
“These latest portfolio acquisitions are consistent with PGIM Real Estate’s strategy to pursue workforce housing investments in well-located, pro-business metropolitan markets with a limited supply of apartments and a robust demand for affordable housing options,” Alfonso Munk, Americas chief investment officer for PGIM Real Estate, said in the statement. “Our ongoing partnership with Carroll Organization will enable us to create an enhanced living experience for the residents at these 13 communities, while delivering compelling, supply-resistant investment opportunities to our investors.”
Carroll told the Wall Street Journal that Southeast states are bringing in corporate relocations that create jobs, but the housing supply in these areas hasn’t grown much because median income hasn’t grown. That's why workforce housing matches well with the job creation there, he said. Read more here.
The venture’s latest Southeast multifamily investments include:
- An eight-property, 2,883-unit multifamily portfolio located in the Raleigh-Durham area.
- An adjacent two-property, 480-unit multifamily portfolio located in Ponte Vedra Beach, Florida.
- A three-property, 680-unit Class B multifamily portfolio in Charleston, South Carolina.
Carroll Organization, which acted on behalf of its latest investment vehicle, Carroll Multifamily Real Estate Fund V LP, is a privately held real estate company focused on multifamily investment, management and development. PGIM Real Estate, which acted on behalf of institutional investors, is the real estate investment business of PGIM, the global investment management businesses of Prudential Financial Inc.
The Raleigh, Ponte Vedra Beach and Charleston acquisitions were led by Jim Mehalso, Atlanta-based managing director and head of Southeast Transactions at PGIM Real Estate, and Josh Champion, president and chief investment officer for Carroll Organization.
