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CPP Investments, Greystar to invest $1B in U.S. single-family rentals

CPP Investments is expanding its multi-billion-dollar partnerships with U.S.-based Greystar Real...

IMAGE: CPP Investments logo.CPP Investments is expanding its multi-billion-dollar partnerships with U.S.-based Greystar Real Estate Partners LLC, announcing a $1.06-billion (all figures Cdn) joint venture in the single-family rental community sector.

CPP is taking a 95 per cent stake in the joint venture and Greystar will own the remaining five per cent. Greystar is a major investor, developer and property manager in the rental housing sector both in the U.S. and globally.

“We’re pleased to make our first investment in the sought-after single-family rental sector alongside our existing partner Greystar,” said Peter Ballon, managing director, global head of real estate, CPP Investments, in Wednesday’s announcement. “Purpose-built single-family rental properties are becoming more desirable for a large and growing segment of renters in the U.S., particularly families or other renters looking for more space without sacrificing access to urban centres.”

The CPP, Greystar joint venture

The joint venture plans to develop and acquire professionally managed rental communities consisting of detached or semi-detached homes and townhomes with private garages and backyards.

The partnership will target development areas near employment hubs, transit and retail centres across the Sunbelt, Mountain West and West Coast regions of the United States.

Each community will have onsite leasing and maintenance as well as other communal amenities in line with Greystar’s existing management strategy. Greystar will operate and manage the portfolio on behalf of the joint venture.

“At Greystar, we pride ourselves on our ability to drive innovation across the rental housing industry, while increasing supply at the same time,” said Bob Faith, the founder, chairman and CEO of Greystar, in the release. “This new wave of purpose-built, accessible rental communities is giving new options to renters who are seeking more space in a safe and professionally managed, quality home.”

Existing partnerships

The single-family joint venture extends CPP Investments’ existing partnership with Greystar. Earlier this year they announced an initiative to develop multifamily properties in targeted U.S. markets valued at almost $500 million, with CPP holding a 90 per cent stake and Greystar the remaining 10 per cent.

In July, CPP Investments and Greystar kicked off a partnership in the life sciences sector, committing over $1.5 billion to develop class-A life science office and lab buildings in U.S. markets which are leaders in the sector. The first acquisition was 74M, an office and lab development project located in Somerville, Mass.

CPP Investments owns a 90 per cent stake in the project and Greystar the remaining 10 per cent.

They are also involved with Cyrela Brazil Realty on a multifamily joint venture focused on the Brazilian city of Sao Paolo, which was launched in 2019.

About CPP Investments and Greystar

CPP Investments holds a diversified portfolio of global assets public equities, private equities, real estate, infrastructure and fixed income.

Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments.

At September 30, 2021, the fund totalled $541.5 billion.

Greystar is a fully integrated real estate company offering expertise in investment management, development, and management of rental housing properties globally. Headquartered in Charleston, S.C., Greystar manages and operates approximately $230 billion of real estate in 215 markets globally.

Greystar is the largest operator of apartments in the United States, manages more than 754,000 units/beds, and has a robust institutional investment management platform with approximately $49.9 billion of assets under management, including $22.6 billion of development assets.

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