Investcorp Expands Residential Real Estate Portfolio with $400 Million Investment in Three States

23 Feb 2017

Investcorp, a leading provider and manager of alternative investment products, today announced that its U.S.-based real estate arm has invested in three multifamily housing properties in New York, California, and Nevada for a total purchase price of nearly $400 million.

All three properties are located in markets which benefit from robust fundamentals in the multifamily space.

Mohammed Alardhi, Executive Chairman of Investcorp said: “As we look to the next phase of growth for Investcorp, we have great confidence that the U.S. is a place where our investments will continue to serve our global client base well, as we believe the U.S. economy is poised for significant growth. We have a long history of investments in the U.S., and our $1.2 billion investment in residential properties in the past 18 months demonstrates our belief that the U.S. real estate market provides high-quality investments that will generate steady returns in the years to come.”

Fahad Murad, Managing Director at Investcorp for Bahrain, said, “Investcorp continues to see the U.S. as an attractive market for real estate investments; not only because of its robust fundamentals, but also because of our strong understanding of the market dynamics. These properties fit well with our existing portfolio of residential space, and we believe that we are well positioned to bring more attractive opportunities for our investors in the coming period.”

Atlantic Point is a 795 unit, Class A, 115 acre multifamily housing property located in Bellport, New York, which is located within the Nassau County-Suffolk County Metro Division. Suffolk County is one of the tightest multifamily housing markets in the U.S. with a vacancy rate of 2.9%. Given the high cost of land and strict zoning regulations which makes it difficult to build, the area has seen minimal new development since the 1990s. This has led to a favorable supply / demand imbalance in the overall market. The region is home to Brookhaven National Lab, Stony Brook University, Brookhaven Memorial Hospital and Stony Brook University Hospital.

The Highlands is a 556 unit, Class B, garden-style multifamily housing unit in Grand Terrace, California, in the Riverside-San Bernardino MSA. In this area, the multifamily market leads the nation in rent growth, having logged 5.1% in rent growth in 2016.  Market-wide vacancy is projected to average 2.4% over the next five years.

Villas at Green Valley is a 609 unit, Class B, garden-style multifamily housing property located in Henderson, Nevada, in the Las Vegas MSA. The metro Las Vegas economy has rebounded strongly since the 2008/2009 downturn. As a result of factors like no state income tax, a low cost of living, and a favorable climate, population growth has exceeded 50% since 2000. Further, over the next five years, the metro area is projected to lead the nation in population, employment and real Gross Metropolitan Product (GMP) growth, all of which are expected to be solid drivers for multifamily demand.

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