By Mario Marroquin
Denver-based REIT Apartment Investment & Management Company and the Alaska Permanent Fund Corporation have signed a limited partner equity development agreement. APFC, which aims to deploy approximately $2.7 billion towards real estate through 2023, agreed to fund up to $1 billion of new multifamily developments while the Denver-based developer agreed to commit at least $40 million in funding or assets towards the venture.
An SEC filing by Apartment Investment & Management Company states projects in the venture must generate a minimum profit margin of no less than 20% at final completion and that at stabilization, projects will generate a yield of “no less than 150 basis points in excess of the projected capitalization rate at stabilization,” with a minimum investment of $50 million per project.
The investment guidelines filed by Apartment Investment & Management also state the Anschutz apartment project in Aurora in the Denver suburbs is eligible for the venture.
“For [Apartment Investment & Management], this agreement underscores the quality of the opportunities sourced by our team and provides the opportunity to unlock the value embedded within our development pipeline,” Lynn Stanfield, the firm’s chief financial officer, said in a statement.
In an interview with Markets Group in June, APFC Chief Investment Officer Marcus Frampton said the $79 billion AUM pension fund is targeting new development or buying existing core real estate rather than fund investments.
APFC reported a total fund return of -1.32% on a fiscal year-to-date-basis at the end of June while posting double-digit negative returns for public equities and fixed income. Meanwhile, the sovereign wealth fund reported a 23.41% return for real estate over the same period.