(Bloomberg)—Canada Pension Plan Investment Board is partnering with homebuilder Lennar Corp. in a $979 million joint venture to construct apartment buildings in the U.S. as a housing shortage pushes rents higher.
The pension fund, which has increasingly been targeting U.S. rental housing, will own 96% of the venture while Lennar will take the balance, according to a statement Tuesday.
“This investment is an excellent opportunity to meet the strong demand for high-quality multifamily housing,” Peter Ballon, Canada pension plan’s head of global real estate, said in the statement.
The investment comes as both rents and home prices soar in the U.S. amid a shortage of available properties. This is the third partnership the Canadian pension plan has struck in the past year to build rental housing in the U.S. as it joins a flood of institution capital pushing into the space.
The partnership with Lennar will launch with a total of 1,371 apartments at five properties -- one in Boston, one in Miami, and three in Denver, according to the statement.
“This joint venture specifically targets high-growth markets where the housing supply hasn’t kept pace with renter demand,” Todd Farrell, president of Lennar’s multifamily unit said.
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