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.