(Updates with comment from spokeswoman in last paragraph.)
July 6 (Bloomberg) -- RREEF, the real estate investment arm of Deutsche Bank AG, said it bought a 40-story apartment tower in Chicago and two multifamily complexes in Seattle for a total of $151 million to take advantage of rising rents.
RREEF America Real Estate Investment Trust II purchased Cityfront Place, a 480-unit building with views of Lake Michigan and the Chicago skyline, for $107 million, RREEF said today in a statement. The REIT paid $44 million for Eden Hill and Sweetbrier, two four-story buildings with 81 apartments and 27,000 square feet (2,500 square meters) of street-level retail in Seattle’s Queen Anne neighborhood.
“Seattle’s economy is in recovery and is outpacing the U.S. due to a rebounding aerospace industry and a concentrated tech sector,” Mayura Hooper, a spokeswoman for Frankfurt-based Deutsche Bank, said in an e-mail. In Chicago, “the confluence of limited new supply and enhanced demand is setting up conditions for strong rent growth,” she said.
Investor demand for U.S. commercial real estate, including apartment buildings, is being driven up by a lack of new supply and low interest rates, PricewaterhouseCoopers LLP said in a report last month. Apartment vacancies fell to the lowest in almost three years in the first quarter as the weak homebuying market fueled demand for rentals, according to Reis Inc.
The Chicago tower was purchased from Cityfront Chicago LLC and the Seattle buildings from partnerships of closely held Emerald Bay Equity, which is based in the city, Hooper said.
Deutsche Bank’s real estate unit had $59.4 billion in assets under management as of March 31. It has developed two apartment towers in Chicago during the past six years and owns three multifamily properties in the Seattle area.
“RREEF expects the apartment asset class to remain the preferred sector for institutional investors in 2011,” Hooper said.
--Editors: Daniel Taub, Kara Wetzel
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