Barings’ U.S. Real Estate Strengthens With $7.5 Billion Transactions in 2019
Barings, one of the world’s largest diversified real estate investment managers, expects 2020 to be an extremely active year after completing $7.5 billion in U.S. real estate transactions in 2019, on behalf of institutional clients.
The U.S. real estate equity and debt teams’ robust pipeline contributed to the $7.5 billion in 2019 real estate transaction activity, of which $1.5 billion relates to equity acquisitions, $2.0 billion equity dispositions and $4.0 billion in loan originations.
A total of 41 equity transactions, made up of 14 acquisitions and 27 dispositions, were spread across core and core+/value-add risk profiles throughout key U.S. markets. Barings completed $901 million of apartment, $158 million of industrial, $391 million of office and $68 million of retail acquisitions, up 16% from 2018 in total acquisition activity.
“2019 was a busy year with continued acquisition growth; however, we ended the year as net sellers ($2.0 billion sales versus $1.5 billion in acquisitions) based on robust sale markets and strong opportunities to reposition portfolios tactically through effective rotation of opportunity,” said John Ockerbloom, Head of Barings’ U.S. Real Estate Equity.
The Global Real Estate Debt Team originated $4.0 billion in U.S. core (76%) and structured (24%) loans in 2019 across all asset classes. Over 40% of these transactions were related to residential, core loans leveraging our team’s strong proficiency and relationships within this market.
Ben Silver, Head of Global Real Estate Debt concluded, “In 2019, we were able to reflect and fine-tune processes and procedures across the many groups that make up the Barings Global Real Estate Debt team. The hard work completed in 2019 has enabled us to focus on fundraising for exciting new strategies which is designed to increase acquisition volume culminating in what we hope to be be stronger returns for our clients in 2020.”
We believe the formation of a talented and aligned Barings Real Estate (BRE) leadership team can be critical to providing strong risk adjusted returns for our clients. The BRE leadership team was solidified with the appointment of John Ockerbloom as the Head of U.S. Real Estate Equity in July 2019. Ockerbloom’s strong presence in the industry, leadership and motivational talent coupled with his 20 years of investment and management experience position him to drive the execution of our client real estate mandates and commingled funds. The Global Real Estate Debt team is led by Ben Silver who has been instrumental in successfully guiding his team through various investment cycles and identifying key markets to enter. Silver has been vital to the global growth of the real estate debt business, and having a leader with his acumen has allowed BRE to capitalize on the real estate debt market in the U.S. and Europe. Obtaining leaders that effectively guide different groups of people to consistently perform at their peak is crucial for a thriving, transparent environment.
BRE relies heavily on the data-driven perspective from Barings’ internal Real Estate Research & Analytics team. During 2019, the Real Estate Research & Analytics team executed a strategic platform enhancement further aligning themselves with the objectives of BRE. This enhancement promotes real estate sector and geographic expertise that is complemented by an analytics function amplifying the team’s ability to collect, augment, and analyze data. Philip Conner joined Barings in 2019 as Head of U.S. Real Estate & Strategy from Abu Dhabi Investment Authority where he was a Senior Portfolio Manager on the Investment Research Public Markets team. Conner has been effectively capturing the BRE investment team’s judgment and experience, empowering and targeting it in an effort to maximize its positive effect on our clients’ capital and our business. Leveraging Conner’s 25+ years of investment and research experience has bolstered the entire BRE platform.
Barings U.S. Real Estate team manages $38 billion in AUM, supporting 140+ institutional investors.
Highlights during 2019 include:
- Growing Industrial Portfolio in prominent U.S. markets including the forward acquisition of a to-be-built 345,000 square foot, state of the art industrial building located in the thriving Metro-Boston area
- Cultivated a strong presence in rising markets, such as Austin, Texas, with the joint venture development of a five-story, 120,935 square foot office building
- Growing “live, work, play” portfolio with the joint venture development of a 650-unit, Class A apartment project that will be integrated into a mixed-use development comprised of 322,000 square feet of lifestyle retail center and 250,000 square feet of creative office
- Completed a multi-year hotel renovation of a 727-room Marriott resort into an 809-room luxury JW Marriott resort
- Barings co-financed a $319 million core loan for a premier creative office building located in a high-rent section of San Francisco
- Barings’ agile origination team successfully closed a $141 million core loan for a multi-family portfolio in a quick and efficient time-frame
Barings Real Estate
Barings Real Estate (BRE) offers a broad range of global investment opportunities across the private debt and equity real estate investment markets. BRE invests in all major property sectors and offers a broad range of financing solutions to real estate borrowers. BRE also specializes in providing government and government-sponsored entity lending products through our wholly owned subsidiary, Barings Multifamily Capital. Follow us on LinkedIn at www.linkedin.com/showcase/barings-alternative-investments.
Barings is a $338+ billion* global financial services firm dedicated to meeting the evolving investment and capital needs of our clients and customers. Through active asset management and direct origination, we provide innovative solutions and access to differentiated opportunities across public and private capital markets. A subsidiary of MassMutual, Barings maintains a strong global presence with business and investment professionals located across North America, Europe and Asia Pacific. Learn more, at www.barings.com.
*As of December 31, 2019