Allianz Real Estate, acting on behalf of several Allianz group companies, has increased its residential exposure in the U.S. with a $300m investment into one of the world’s largest private single family rental vehicles, the Upward America Venture. The venture will be managed by LennarSFR, a newly formed subsidiary of the U.S.’s largest homebuilder Lennar Corporation, and Allianz will invest alongside several large institutional co-investors. The venture is positioned to acquire more than $4bn of new single family homes in strategic locations across the U.S.
Karen Horstmann, Head of Acquisitions, Allianz Real Estate, United States
The venture will have access to Lennar’s nationwide homebuilding pipeline, providing a unique competitive advantage to market share of newly built homes and economies of scale in a notoriously fragmented sector. Allianz Real Estate and Lennar have partnered since 2016 when Allianz was an anchor investor in Lennar’s first venture, Lennar Multifamily Venture I and then in 2019 in Lennar Multifamily Venture II, both of which are focused on multifamily rental opportunities across the U.S.
“The Upward America Venture brings the same structure and scale to single family homes that we have seen develop in multi family complexes in recent years,” said Christoph Donner, CEO Allianz Real Estate, United States. “Partnering with Lennar is an important part of the approach we take to new sectors. Lennar’s development expertise and pipeline and the group’s appreciation of the importance Allianz Real Estate places on sustainable buildings constructed with the health and well being of the community in mind positions us well for a long term relationship.”
Allianz Real Estate’s residential exposure is poised to grow in the coming years, benefitting from millennials’ preference to rent newer vintage multi and single family homes, amidst a backdrop of limited new supply. This investment into the single family rental sector forms a diversification play within the U.S. strategy, where Allianz intends to deploy $1.3bn in the residential markets over the next few years.
“The strong demand for single family homes is led by maturing millennials seeking accommodation for their increasing space needs, with a preference for newly constructed homes and a propensity to rent,” said Karen Horstmann, Head of Acquisitions, Allianz Real Estate, United States. “This trend started some years ago and has only been amplified by the more flexible approach many employers are taking to work from home. This household demographic, which will increase the 35-49 age cohort by almost 20% over the next two decades, will value space and modern housing even more than they have done in the past.”
Recent residential deals managed by Allianz Real Estate include multi family assets in the U.S. and Japan, affordable housing portfolios in Germany and the financing of multi family assets in the U.S. alongside student housing in Australia and the UK. Deals announced this year include the acquisition of its first affordable housing portfolio in Germany for $160 million and continued exposure to Japan’s multi family market with a new $89 million transaction in Tokyo. In 2019, highlights included the acquisition of a $1.3 billion multi family residential portfolio spread across Japan and a $1.1 billion Australian core student accommodation program alongside a well-known operational partner. In 2020, the firm acquired two portfolios of prime multi family residential assets in Tokyo for $238 million and in the UK, it acquired an indirect 8.4% stake in Get Living, the UK’s largest Private Rental Sector platform. In the U.S., Allianz financed several residential properties including Bexley Village in North Carolina and Mediterranean Village in California.
