The sale of the six-property, 2,200-unit portfolio, managed by CCLA Group since 2016, represents a successful exit by an international investor in the nascent multifamily sector of the Mexican real estate market.
Mexico City, July 7th 2023. An international investment fund affiliated with CCLA Group has successfully concluded the sale of its interest in a portfolio of six multifamily residential properties, totaling 2,200-units, located in Mexico City and Monterrey, Mexico. The portfolio was sold to a local institutional investor. CCLA Group, through its wholly-owned subsidiary Nomad Living, acted as property manager of the six properties since their acquisition in 2016, successfully completing an extensive operational and physical repositioning of each of the six assets.
CCLA Group is a multifamily-focused, vertically-integrated real estate investment manager focused on major markets in Latin America. In addition to the six properties sold, CCLA Group had 23 projects under development or in operation as of June 2023 across Mexico, Colombia, Peru and Chile, accounting for over 9,000 apartments in aggregate.
“A successful round trip for an international investor is something to celebrate for the multifamily asset type in Latin America. Despite the challenging market environment, there was substantial interest in the portfolio from institutional bidders, both international and domestic. Such investors were drawn to the portfolio’s multi-year track record of sustained high occupancy and strong rent growth above inflation, all while exhibiting an average rent collection delinquency of sub-1%,” said Ramon Diez Canedo, Managing Director of CCLA Group.
At the time of sale, the portfolio was 96% leased with year over year rent growth exceeding 9%.
“We gained an incredible amount of experience with the portfolio. The Mexican residential rental market is highly informal and fragmented, with little transparency and few comps. We were able to achieve rents far superior to the “shadow” market and maintained high occupancy even during the depths of the COVID-19 pandemic. This operating experience allowed us to build a market-leading platform and we are applying lessons learned and best practices to our new projects in Mexico City, Monterrey, Guadalajara, Chile, Colombia, Peru and – hopefully soon – Brazil.” added Jordan Malugen, General Director of Nomad Living.
“With this portfolio, we started our consolidation as leaders in the multifamily market in Mexico and Latam. Since then, we have more than doubled our operations and formed a talented team of professionals that has led the development of over 20 projects across the region, of which five properties in four different countries have already successfully started operations,” added Nora Galvan, VP of Finance and Operations for CCLA Group.
Established in 2016, CCLA Group primarily develops, owns, and operates, well-amenitized multifamily residential apartments including mixed-use real estate assets in Mexico and Latin America. CCLA Group is a joint venture between CIM Group and Compass Group. CCLA Group relies upon CIM Group’s North American opportunistic investment, development, and operational expertise and Compass Group’s long-term asset management track record, strong local footprint and market expertise in Latin America, to oversee the development, design, construction of projects as well as marketing and management of operating residential buildings.
About CIM Group
CIM Group is a community-focused real estate and infrastructure owner, operator, lender and developer. Since 1994, CIM Group has sought to create value in projects and positively impact the lives of people in communities across the Americas by delivering more than $60 billion of essential real estate and infrastructure projects. CIM Group’s diverse team of experts applies its broad knowledge and disciplined approach through hands-on management of real assets from due diligence to operations through disposition. CIM Group strives to make a meaningful difference in the world by executing key environmental, social and governance (ESG) initiatives and enhancing each community in which it invests.
About Compass Group
Compass Group is a specialized asset manager focused on Latin America with operations in eight countries and more than 25 years of experience investing in the region. Initially founded in New York in 1995, today it has operations in several Latin American countries and as of December 31, 2020, the entities that form Compass Group oversee US$41 billion in assets under management, custody, administration, advisory and distribution. Compass Group through its local entities has actively participated in the real estate market in Latin America since 2008, across 9 offices located in Chile, Argentina, Uruguay, Peru, Brazil, Colombia, Mexico, London, Miami, and New York.