SAO PAULO (Reuters) - A unit of Brazil’s TRX Holding Investimentos has entered a joint venture to buy and renovate multi-family housing projects in the United States, hoping to profit from the residential rental market in the world’s largest economy.
TRX and U.S.-based Cornerstone Properties Ltd will contribute equally to the venture, making an initial investment of up to $200 million in four projects in Florida this year, Fernando Fiuza, who heads TRX’s U.S. residential unit, said in an interview on Monday.
The sum is enough to acquire up to 1,500 residential units, Fiuza said. He added that the partners would focus on buying apartment buildings with an occupancy rate of 95 percent, with a view toward renovating and eventually increasing rents.
TRX oversees $1.5 billion in assets in Brazil and the United States as a multi-sector real estate and development company, with interests ranging from the leasing of industrial warehouses to self-storage space and logistics.
After the subprime mortgage crisis, many U.S. families lost their homes to the banks foreclosing on their properties. Data show young Americans have put off buying a home to stay current on their student loans, creating a market of potential tenants, said Fiuza.
“These factors have contributed to reduce home ownership in the U.S. to historically low levels,” Fiuza said.
The joint-venture will invest in so-called multi-family housing, which can vary from traditional apartment buildings to low-rise developments. The venture will initially raise money from wealthy Brazilian investors to help finance up to 30 percent of the building purchases, he said.
The partners will focus on residential assets located in Orlando, Tampa, Miami, Jacksonville and Palm City, he said.
Reporting by Ana Mano; Editing by Guillermo Parra-Bernal and Tom Brown