We’ve been telling you about people fleeing big cities for the Sunbelt, but one PE firm is betting on people staying close to cities and their office buildings. Investment giant, KKR, believes that there are still valuable opportunities outside the highly spoken of Sunbelt.
KKR, through its KKR Real Estate Select Trust Inc. (KREST), has completed the purchases of two class A multifamily properties. The Downtown Brooklyn and West Philadelphia properties boast a combined 1,380 units and offers “best-in-class” amenities with easy access to public transportation, Philadelphia’s universities, hospitals and Brooklyn’s top-performing submarkets.
“We continue to see long-term trends supporting demand for lifestyle-oriented real estate near city centers,” says Daniel Rudin, managing director on KKR’s real estate equity team. “Both of these assets are well-located from a live/work perspective and are ideal for younger working professionals seeking quality lifestyle-oriented housing with easy access to major cities.”
The deals are representative of KKR’s three-pronged investment strategy of real estate credit, prime single-tenant real estate and stabilized income-generating real estate. The deal falls under the thematically-driven, income-generating real estate in high-growth markets which includes well-leased multifamily properties.
While we have talked about the Sunbelt population and real estate investment trends, KKR is not getting bogged down by these population movements. The firm does acknowledge the opportunity and has included the region within its KREST fund through an acquisition of The Beach House Apartments, a Jacksonville, Fla.-based multifamily property.
However, the firm is not catering its entire portfolio to the investment thesis and believes that the migration to the Southern and Western areas of the U.S. is not a new development. The firm’s investment strategy page details that the net domestic migration rate has been flirting around the 5 percent mark for nearly 30 years.
Is anyone you know moving back into the city? Let me know at [email protected].
–Cole Lipsky
