Houston’s Camden to drop $1.1B on Sun Belt portfolio shares

Texas pension system will cash out fund partnership

Texas Teacher Retirement System’s Jarvis Hollingsworth and Camden's Ric Campo (LinkedIn, Camden, iStock)
Texas Teacher Retirement System’s Jarvis Hollingsworth and Camden's Ric Campo (LinkedIn, Camden, iStock)

A Texas property company plans to buy all of the outstanding partnership interests in two discretionary investment funds from the Teacher Retirement System of Texas. The deal involves a $2.1 billion portfolio of multifamily properties located across the Sun Belt, primarily in Texas. The state pension fund entered into a purchase agreement with Houston’s Camden last week, according to a Securities and Exchange Commission filing.

Camden owns 31.3 percent of the funds’ interests. The pension fund will sell the company its 68.7 percent in the transaction. The partnership funds’s gross asset valuation is $2.1 billion. Camden will pay $1.1 billion for TRS’ shares. The purchase will initially be funded with cash on hand and loans under the company’s $900 million unsecured line of credit.

The assets include 22 multifamily communities with 7,247 apartments. The properties are an average of 12 years old. Most are located in the south, southeast and southwest United States. Camden said it expects its net operating income from its Houston, Austin, Dallas and Tampa, Florida, to increase slightly compared to that from its other U.S. properties as a result of the purchase. This transaction is expected to close early in the second quarter of 2022.

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TRS is the state’s largest public retirement system, the sixth largest public pension plan in the United States and one of the top 25 public pension plans worldwide, according to its website. It had 13 percent of its assets, or $22 billion, in real estate as of August 2020. The fund is in the process of selling its longtime downtown Austin headquarters and moving to a new office building it bought in January.

Camden owns and operates 165 multifamily properties with about 160,000 units in 10 states.

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