by Marlena DeFalco
Canada Pension Plan Investment Board (CPP Investments) and LMC, a wholly-owned subsidiary of Lennar Corporation (NYSE: LEN and LEN.B) and a leader in apartment development and management, have formed a new joint venture to develop Class-A multifamily residential communities across high-growth metropolitan areas in the U.S.
CPP Investments and LMC have allocated US$979 million in equity to the joint venture. CPP Investments will own a 96% stake and LMC will own the remaining 4%.
“This investment is an excellent opportunity to meet the strong demand for high-quality multifamily housing,” said Peter Ballon, Managing Director, Global Head of Real Estate, CPP Investments. “We are pleased to work alongside a best-in-class partner like LMC to continue to build our portfolio of multifamily investments, which we believe will deliver steady, long-term returns for the CPP Fund.”
The joint venture will focus on urban and suburban communities across major U.S. markets exhibiting strong population and job growth. It will also leverage LMC’s extensive development and construction expertise to build multifamily communities at an attractive cost basis, and benefit from LMC’s fully integrated development management, construction management, property management and investment management platforms.
The venture will launch with five seed assets: One in Boston, one in Miami and three in Denver, together totaling 1,371 apartment homes.
“This joint venture specifically targets high-growth markets where the housing supply hasn’t kept pace with renter demand, and we are proud to be part of the solution,” said Todd Farrell, President of LMC. “Our partnership with CPP Investments enables us to deliver on our mission to create extraordinary communities where people can live remarkably. We look forward to delivering on that vision with these five initial assets, as well as all future endeavors with CPP Investments.”
LMC launched in 2011 and is among the nation’s most active developers, builders and managers. LMC is currently the eighth largest U.S. developer, according to the National Multi-Housing Council’s (NMHC) annual Top 50 list and has been on the list for seven consecutive years. LMC has been recognized on the NMHC Top 25 Builder list for five consecutive years and ranked No. 15 in 2021. LMC has also closed two previous funds, including Lennar Multifamily Venture (US$2.2 billion) and Lennar Multifamily Venture II (US$1.3 billion).