HQ Capital, a global private equity specialist, today announced it has entered into strategic agreements to transfer a majority interest in HQ Capital Real Estate, an asset manager focused on multifamily residential developments in the United States, to affiliates of Concord Pacific Group and HB Management, a consortium of North American multifamily specialists. HQ will continue to own a minority interest in the ongoing business and maintain a close partnership going forward.
HQ Capital had previously announced that it was evaluating strategic options for its real estate business with a desire to find new partners to support the next phase of growth of the business and strengthen the international investor base for subsequent real estate investment funds. While a number of renowned investors expressed serious interest, the combination of Concord Pacific and HB Management was ultimately selected as the ideal partner for the business based on their significant experiences in large scale mixed-use and multifamily real estate, with established complementary businesses and an international reach spanning the United States, Canada, United Kingdom and Asia as well as their similar, high-quality family office investor base and strong reputations.
“With the transfer of the majority of its real estate business, HQ Capital continues to shape its profile as private equity specialist of HQ”, comments Dr Joachim Faber, chair of the supervisory board of HQ Holding.
“We deliberately took time to evaluate all options for the business in the interest of our existing investors. We are delighted to partner with Concord Pacific and HB Management and are convinced that they are best positioned to take our real estate business to the next level, creating added value for existing and new investors.” adds Dr Bernd Türk, CEO of HQ Capital.
“Concord Pacific has always been active in multiple industries, including real estate development, hospitality, information technology, green energy and telecommunication globally. We have been looking for the right opportunity and the right partner to enter the real estate fund management business. HQ Capital Real Estate’s stellar coast-to-coast track record and impeccable support from both Germany and New York management teams attracted us to this strategic alliance. HB Management has also been a great partner of ours in the United States since 2018. We are excited about another wonderful endeavour with HB with their expertise in the residential multifamily business. Our vision is to collaborate with the firm’s well-established team and to explore new horizons in multiple markets”, says David Ju, Concord Pacific
“HB Management is very pleased with the opportunity to strategically invest with our close partner, Concord Pacific, by bringing new strategic resources to HQ Capital Real Estate’s multifamily investment platform. The firm brings a tremendous track record and new opportunities for HB and Concord to diversify their investment initiative, and to expand its capital horizons. This is a true win-win”, adds Jon Breiner from HB Management.
The completion of this transaction is expected to occur in the next months and is subject to customary approvals. The parties agreed not to disclose further details of the transaction. HQ Capital Real Estate will continue to build on its proven investment strategy focused on partnering with high-quality apartment developers and selectively acquiring existing multifamily properties with significant value creation potential in key growth markets across the United States.
Lazard acted as financial advisor and Greenberg Traurig acted as legal advisor to HQ Capital on this transaction. Fried Frank acted as legal advisor to Concord Pacific and HB Management on this transaction.
About HQ Capital Real Estate
Founded in 1989 as Real Estate Capital Partners, HQ Capital Real Estate is a dedicated U.S. real estate investment advisor specializing in multifamily investments. Since its inception, the firm has invested in approximately $15 billion of U.S. real estate through sponsored funds and separate accounts on behalf of global institutions, family offices and ultra-high net worth individuals. Through its consistent participation in the market over the past three decades, HQ Capital Real Estate has developed deep relationships with some of the top real estate owners, operators, developers, brokers and lenders in the United States, providing the firm with access to a pipeline of exclusive investment opportunities. Overseeing these transactions is a committed senior management team who has worked together since 2005 and has an average tenure at the firm of 20 years. In-house capabilities of the company go beyond its investment management expertise and include asset and construction management, capital markets, legal, and tax structuring expertise. These attributes combined have resulted in a successful historical multifamily track record of 221 realized opportunistic and value add fund investments with an overall gross IRR of 21.1%.[1]
About Concord Pacific
Established in Canada in 1988, Concord Pacific Group is a diversified privately-owned enterprise with investments and operations in green energy, telecommunications, information technology, hospitality and real estate development. It is widely recognized and most well-known for developing Canada’s largest mixed-use high-rise urban communities including defining the downtown skylines of Vancouver and Toronto. Concord Pacific is one of North America’s most innovative and preeminent real estate developers with a focus on world-class master-planned urban high-rise communities. Its work includes residential development ranging from affordable housing to luxury rental and condominium residences; hotel and hospitality developments; and major mixed-use master plans reshaping the fabric of major cities. With more than 30 years of experience in Canada, the U.S. and the U.K., Concord Pacific has successfully delivered more than 150 high-rise residential towers representing approximately 26 million square feet of livable space. The group maximizes value through owning every major step of the development cycle. It is a fully integrated delivery system that has a deep commitment to robust management, as well as pragmatic and sustainable designs. Concord Pacific has built a practice around sustainable investments and multi-disciplined diversification. The visionary concept of integrating technology and environmentally sustainable solutions into a full spectrum of its businesses has carried the group successfully beyond real estate development and fostered long-lasting relationships with top-tier lenders and institution investors.
Visit www.concordpacific.com for more information.
About HB Management
Headquartered in Seattle, Washington, HB is a business and investment management entity of the Hewson and Breiner family offices. The managing principals of HB are Edward Hewson and Jonathan Breiner, second- and third-generation managers of their family businesses. HB’s legacy as a U.S. multifamily investor began in apartment buildings in the suburbs of New York City in the 1950s, and expanded to the Western U.S. in the 1990s. Today, a good portion of the firm’s investment has been focused on the Seattle area of the Pacific Northwest. HB manages over $3 billion worth of multifamily real estate and controls entities specializing in development, management, large-scale acquisitions, and brokerage. HB has been an instrument for large institutional investors and family offices throughout North America in the apartment building sector. In addition, HB has diversified interests in other asset classes such as hospitality, retail, transportation, and communications. HB’s subsidiaries in the multifamily space include: HB Management, Indigo Real Estate Services, and Paragon Real Estate Advisors. HB Management, established in 2006, has developed large-scale apartment projects in the Pacific Northwest of the United States with a focus on Seattle, Washington. The company has successfully developed high-rise apartments in the downtown environment and mid-rise and suburban style apartments outside of the city core business districts. HB also has master planned neighborhoods near transit centers in Seattle. Indigo, founded in 1995, manages approximately 10,000 apartment units in four states on behalf HB partnerships, institutions, and other high net worth investors. The company has managed and reported for some of largest financial institutions in the United States. Paragon Real Estate Advisors, founded by Ed Hewson and other partners in 1995 and later acquired 100% by HB in 2010, is the Seattle area’s largest privately owned apartment building brokerage, with a history of nearly 2,000 multifamily investment transactions.
Visit www.hbnorthwest.com for more information.
About HQ Capital
Founded in 1989, HQ Capital has invested around $8billion in private equity in the U.S., Europe and Asia through funds and individual mandates on behalf of its investors as to date. More than 90 specialists identify the best private equity managers from New York, Bad Homburg and Hong Kong and invest in them through primary, secondary and co-investments. HQ Capital relies on more than 30 years of local expertise and networks in the respective markets. Since its foundation, the firm has made around 685 private equity investments in North America, Europe and Asia with over 275 managers and launched 26 fund programs. A sustainable increase in value is just as important as broad diversification and precise risk management.
Visit www.hqcapital.com for more information.
[1] As of December 31, 2020. The number of investments represents the total number of opportunistic and value-add investments including co-investments made across funds since 1989.
HQ Capital
