MacFarlane and Bouwinvest Form Venture to Own and Operate New, $750 Million Residential High-Rises in New York and Los Angeles
August 06, 2018
Dutch institutional investor Bouwinvest Real Estate Investors and MacFarlane Partners, a real estate investment manager and developer that specializes in investments promoting smart growth, urban revitalization and sustainability, have formed a joint venture to own and operate newly built residential high-rises in New York and Los Angeles with a combined total value of $750 million.
The joint venture’s two investments are a partial equity interest in Level BK, a 40-story rental apartment tower along Brooklyn’s Williamsburg waterfront in New York that was completed earlier this year, and full ownership of the 24-story Park Fifth high-rise rental apartment project that is currently under construction in downtown Los Angeles.
Gijs Plantinga, Bouwinvest’s Director of Northern America Investments, said: “The new joint venture with MacFarlane Partners is the spearhead for Bouwinvest’s strategy of expanding its investments in North America through co-investments and joint ventures as we target lifting our assets under management in these markets to €1.5 billion by 2020. The residential sector with its positive market fundamentals, driven by U.S. population growth, sits at the center of this core investment strategy.”
Level BK consists of 554 apartment units, many of which feature unobstructed views of the Manhattan skyline. The property is adjacent to an East River Ferry terminal and East River State Park, which hosts Smorgasburg, a weekly foodie market that is one of Brooklyn’s most popular destinations. It was developed by Douglaston Development, a real estate development firm based in New York, in partnership with MacFarlane and AIG Global Real Estate. Both Douglaston and AIG Global Real Estate will continue to be equity partners in the property alongside the new Bouwinvest-MacFarlane joint venture.
The Park Fifth high-rise will consist of 347 apartment units and 5,300 square feet of retail space. It is located across from Pershing Square, one of the largest public spaces in downtown Los Angeles; the historic Millennium Biltmore Hotel; and a subway portal to the Pershing Square Metro Station. It is being developed directly by MacFarlane adjacent to a seven-story rental-apartment mid-rise that the firm is also building. Both properties are expected to be completed during the first half of 2019.
The two properties have been developed as assets of MacFarlane’s Urban Real Estate Fund III, a privately offered commingled fund that has invested in real estate development projects nationwide and in which Bouwinvest is a partner.
The formation of the new venture with Bouwinvest is part of MacFarlane’s strategy to keep some of the irreplaceable assets that it has created, enabling the firm and its capital partners to retain—and increase—their equity ownership interests in selected development projects after those projects have been completed. Under the new venture, both Bouwinvest and MacFarlane significantly increased their equity investments in each property.
Bouwinvest’s North American investments are part of a broader international growth strategy where the institutional investment manager is also expanding across Asia-Pacific and European markets to raise the proportion of real estate assets held outside its domestic Dutch home base to 40% of the total portfolio. Within the Netherlands, Bouwinvest manages its assets in-house, and internationally it is aiming to do more direct investments with local operating partners such as MacFarlane.
Through its urban real estate program, which was launched in 1996, MacFarlane typically has sold its and its partners’ stakes in the properties it has developed, renovated or repositioned shortly after each project was completed. Over the past 22 years, the firm has invested in $13 billion in properties located in urban and high-density suburban neighborhoods of major metropolitan areas nationwide.
Victor B. MacFarlane, chairman and chief executive officer of MacFarlane Partners, said: “We have helped create a generation of institutional-grade, core properties in major urban markets such as New York, San Francisco, Los Angeles and Washington, D.C. Now we and Bouwinvest will look to benefit from the income and appreciation gains that long-term ownership of high-quality assets located in top-tier U.S. markets can deliver.”
The new joint venture expands MacFarlane’s relationship with Bouwinvest, which began 10 years ago with the latter’s investment in Urban Fund III.
About MacFarlane Partners
MacFarlane Partners is a real estate investment management and development firm that acquires, develops and manages properties on behalf of some of the world’s largest pension plans and institutions. Founded in 1987, the firm pioneered the urban investment concept among institutional real estate investment managers in the 1990s and today is a leading investor in and developer of properties that promote smart growth, urban revitalization and sustainability in urban and high-density suburban areas nationwide. It is headquartered in San Francisco and operates a regional office in Los Angeles. For additional information, please visit www.macfarlanepartners.com.
Bouwinvest Real Estate Investors B.V. specializes in managing real estate portfolios for institutional investors. Bouwinvest strives to achieve risk-adjusted returns on behalf of its pension fund clients. It manages €10.5 billion (HY 2018) in assets within five Dutch property sector funds and three international real estate investment mandates in Europe, North-America and Asia-Pacific.
With 65 years of experience and a heritage rooted in pension funds and the construction industry, Bouwinvest understand the needs of long-term institutional investors and the dynamics of the domestic and international real estate investment markets. It has an experienced team of 150 investment professionals.
With its long, successful track record of managing real estate investments in the Netherlands, Bouwinvest has been able to transfer this winning model to markets across the globe with similarly successful results. What its learns abroad can also be applied at home. For more information please visit www.bouwinvest.com.
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