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PGIM Real Estate global transactions rose 43% in 2021, driven by US logistics, affordable and senior housing, ESG
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NEWARK, N.J.--(BUSINESS WIRE)--
PGIM Real Estate completed a record $42.7 billion in transactions globally in 2021, up 43% from the prior year — including $35 billion in transactions in the U.S. alone, up 38% from the previous year. PGIM Real Estate is the $209.3 billion real estate business of PGIM.
Cathy Marcus, Global Chief Operating Officer and Head of U.S. Equity, PGIM Real Estate (Photo: Business Wire)
In Asia-Pacific, the firm completed $3.0 billion in 68 transactions and in Europe$4.7 billion in 76 transactions — across both debt and equity transactions.
“The growth in PGIM Real Estate’s portfolio has been largely led by our success investing in high conviction themes driven by four key growth pillars: digital transformation, generational change in living habits increasing demand for affordable housing, the aging population, and ESG credentials,” said Cathy Marcus, global chief operating officer and head of U.S. equity for PGIM Real Estate. “One advantage of being a large real estate investor with a broad platform is that we can explore new ideas and trends in funds with different risk profiles and deploy capital with flexibility.”
Bryan McDonnell, head of U.S. Debt and chair of Global Debt for PGIM Real Estate, added, “A strategic advantage of our global lending reach is our ability to identify movements in the capital markets and trends in real estate in different regions of the world. This perspective allows us to confidently lend across a range of risk profiles to offer solutions to our borrowers and provide a range of investment options for our investors, while maintaining a consistent focus on these key growth pillars.”
Digital Transformation Drives Logistics Activity
PGIM Real Estate entered strategic joint ventures with logistics developers and completed a total of $5.6 billion across 99 logistics transactions in the U.S., as the rise of e-commerce continues to fuel the sector. Representative deals include the $440 million acquisition of Bayonne Logistics Center on behalf of PGIM Real Estate’s core fund and the $250 million fixed-rate financing of a “last-mile” core logistics portfolio. Bayonne Logistics Center, a 115-acre site along the Upper New York Bay, enables the tenant to use a newly developed “roll-on and roll-off” delivery strategy, floating packed vans across to Brooklyn on barges, thus saving on costs and reducing the number of trucks on the road. The “last-mile” core logistics portfolio consists of five properties across Atlanta, Dallas-Fort Worth, Chicago, Memphis, and California’s Central Valley, enabling same-day and next-day delivery to customers.
Growing Demand for Affordable Housing Options
PGIM Real Estate demonstrated its commitment to bringing high-quality affordable accommodation to the U.S. market through its joint venture with Legacy Communities for a national housing portfolio of manufactured home communities, and recently completed the disposition of a five-property manufactured housing portfolio located across Florida, Ohio and Massachusetts. The Debt platform also continued its role as a Government-Sponsored Enterprise (GSE), Agency and Federal Housing and Administration lender, lending $1.9 billion to the affordable housing sector over the last year.
An Aging Population Fuels Senior Living Development
PGIM Real Estate invested $1.6 billion into the senior living sector in 2021, anticipating increasing demand for these communities, driven by aging population demographics throughout the United States. Representative deals include the $78 million development of Holden Delray Beach, a 187-unit independent living, assisted living and memory care project in Florida managed by The Arbor Company — PGIM Real Estate’s largest operator partner.
ESG Credentials Attracting More Than Goodwill
PGIM Real Estate’s commitment to reduce operational carbon emissions of its global portfolio of managed properties to net zero by 2050 includes its recent development of a 10-story, 220,000-square-foot, class A+ carbon-neutral office building in Bellevue, Washington. The building — with a “big tech” tenant already signed — will target LEED Gold and LEED Zero certification, buy green power and avoid the use of fossil fuels, buying carbon offset credits when necessary. In 2021, the firm completed more than $1.4 billion of debt and equity investments across 22 office transactions in the U.S., prioritizing the upgrade of properties’ ESG-credentials.
ABOUT PGIM REAL ESTATE
As one of the largest real estate managers in the world with $209.3 billion in gross assets under management and administration,1PGIM Real Estate strives to deliver exceptional outcomes for investors and borrowers through a range of real estate equity and debt solutions across the risk-return spectrum. PGIM Real Estate is a business of PGIM, the $1.5 trillion global asset management business of Prudential Financial, Inc. (NYSE: PRU).
PGIM Real Estate’s rigorous risk management, seamless execution, and extensive industry insights are backed by a 50-year legacy of investing in commercial real estate, a 140-year history of real estate financing,2 and the deep local expertise of professionals in 32 cities globally. Through its investment, financing, asset management, and talent management approach, PGIM Real Estate engages in practices that ignite positive environmental and social impact, while pursuing activities that strengthen communities around the world. For more information visit pgimrealestate.com.
ABOUT PGIM
PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world3 with $1.5 trillion in assets under management as of Dec. 31, 2021. With offices in 17 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit pgim.com.
Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com.
1 As of Dec. 31, 2021. AUM reflected as gross. Net AUM is $137.9 billion and AUA is $45.9 billion.
2 Includes legacy lending through PGIM’s parent company, Prudential Financial, Inc. 3 PGIM is the investment management business of Prudential Financial, Inc. (PFI). PFI is the 10th largest investment manager (out of 477 firms surveyed) in terms of global assets under management based on Pensions & Investments’ Top Money Managers list published on May 31, 2021. This ranking represents global assets under management by PFI as of Dec. 31, 2020.
For Professional Investors Only. All investments involve risk, including the possible loss of capital.
PGIM is the primary asset management business of Prudential Financial, Inc (PFI). PGIM Real Estate is PGIM’s real estate investment advisory business and operates through PGIM, Inc., a registered investment advisor. Registration as a registered investment advisor does not imply a certain level of skill or training. PGIM, their respective logos as well as the Rock symbol are service marks of PFI and its related entities, registered in many jurisdictions worldwide. PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.
This material is for informational purposes and sets forth our views as of the date of this release. The underlying assumptions and our views are subject to change.
In the United Kingdom, information is issued by PGIM Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 193418). In the European Economic Area (“EEA”), information is issued by PGIM Real Estate Luxembourg S.A. with registered office: 2, boulevard de la Foire, L-1528 Luxembourg. PGIM Real Estate Luxembourg S.A. is authorised and regulated by the Commission de Surveillance du Secteur Financier (the “CSSF”) in Luxembourg (registration number A00001218) and operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Limited in reliance of provisions, exemptions or licenses available to PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Limited and/or PGIM Real Estate Luxembourg S.A. to persons who are professional clients as defined under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II). PGIM Real Estate Germany AG is a German Capital Management Company with a respective license pursuant to sec. 20, 22 of the German Capital Investment Act (Kapitalanlagegesetzbuch–KAGB). In case PGIM Real Estate Germany AG markets or distributes units or shares in external investment funds, i.e., investment funds for which PGIM Real Estate Germany AG does not provide the collective portfolio management within the meaning of Directive 2011/61/EU or, respectively, the KAGB, such marketing or distribution is performed in accordance with sec. 20 para. 3 no. 6 KAGB. PGIM Real Estate Germany AG is not responsible for the collective portfolio management (including portfolio and risk management) within the meaning of Directive 2011/61/EU or, respectively, the KAGB, with regard to the respective investment funds in this case. It is also not responsible for the content of any marketing material (including prospectus, Offering Memoranda, etc.) provided by the fund manager or other third parties. PGIM Real Estate Germany AG will not examine or assess the individual situation of any prospective investor and does not provide any personal recommendations, including recommendations related to tax issues, to prospective investors relating to transactions in the respective investment funds. Where relevant, prospective investors should seek advice from qualified third parties before they take an investment decision. The information provided in the document is presented by PGIM (Singapore) Pte. Ltd., a Singapore investment manager that is registered with, and licensed by the Monetary Authority of Singapore. In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 (paragraph (a) to (i) of the Securities and Futures Ordinance (Cap. 571). In Japan, information is issued by PGIM Real Estate (Japan) Ltd., a Japanese asset manager that is registered with the Kanto Local Finance Bureau of Japan. In Australia, information is issued by PGIM (Australia) Pty Ltd (“PGIM Australia”) for the general information of its “wholesale” customers (as defined in the Corporations Act 2001). PGIM Australia is a representative of PGIM Limited, which is exempt from the requirement to hold an Australian Financial Services License under the Australian Corporations Act 2001 in respect of financial services. PGIM Limited is exempt by virtue of its regulation by the Financial Conduct Authority under the laws of the United Kingdom and the application of ASIC Class Order 03/1099. The laws of the United Kingdom differ from Australian laws.
