Just barely a week ago, we announced the first acquisition of TH Real Estate’s new team in Miami, the firm that brings together and manages real estate investments for Nuveen, the investment management arm of TIAA. Promenade Shopping Plaza in Palm Beach Gardens Florida, a 202,696-square-foot shopping center, traded hands for an amount that could be close to 60 million dollars.
Since January of this year, Manuel Martín has been responsible for establishing the company’s physical presence in the city, and for creating the team that will manage operations and portfolio assets in the southeastern region of the United States and in Latin America. The regional real estate portfolio is valued at $10.5 billion, divided between offices, commercial and industrial real estate, and multifamily housing, all of which are located throughout 11 south eastern US states, (from Texas to North Caroline to FL), except for one in Brazil.
The monitoring and eventual expansion of its presence in LatAm has been precisely one of the company’s reasons to open this office. “We are now starting to look at Latin America. There are opportunities in the big Brazilian cities, in Santiago, Chile, which is a very stable and very good enclave for money, and in Mexico City,” says Martin, who thinks that Brazil is very big and, although it may be experiencing certain difficulties, some sectors are very strong. “We need strategies for these cities and we need a local partner.”
“The challenge lies in the product, not the money. If we find the right product, we have the money,” answers Martín when we ask about the resources included in his management mandate. As for the average size of his company’s operations, he notes that “we do not set a maximum amount per transaction, nor do we usually look at assets of less than 25 million. The capital range is very broad and very dynamic.”
Those funds that are looking for good opportunities to invest in, come from TIAA capital (retirement/pension plan contributions from individual investors), and from external institutional investors (pension funds, sovereign wealth and insurance companies,) some of which can carry out co- investments with TIAA, explains the executive. The income generated by the portfolio comes from the monthly rent during the period of tenure of the property, which can extend for a period between five to 10 years, as well as the capital gains obtained from its transfer.
Regarding the opportunities, Martín thinks that they exist in the office segment of big cities like Houston, Miami, or Austin; In retail, especially in South Florida, where the market remains strong despite the recession – thanks to its huge shopping tourism sector; In the industrial segment in big markets; but not in multi-family residential.
He believes that the Miami market is at the end of a cycle, however, ‘given that leverage is much lower, bond yields returns low and a new US administration, we believe Real Estate will experience a soft landing’. According to Martin, the behavior of the residential segment has been above expectations and, at the moment, there is a downward trend in condos, while the apartments for rent are fine. Regarding the offices, he points out that “there aren’t many new ones, but there are not very big tenants in the city,” and retail “is behaving very well.”
Martin, who already has a team of five professionals, plans to add two more in the month of June, and plans to close the year with a total of nine. In addition, in May they will occupy their new offices in Brickell Key.
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