VCBank Expands its Multifamily Property Portfolio in USA

Venture Capital Bank (VCBank), a Bahrain-based Islamic wholesale bank, licensed from the Central Bank of Bahrain, announced today that it had expanded its multifamily property portfolio in the USA through the acquisition of Glenbridge Manors in Cincinnati, Ohio, for a total transaction value of US $57 million.

This investment marks the Bank’s fourth property acquisition in the resilient multifamily property sector; and continues its collaboration with a long-standing US partner, who has extensive experience in the management and operation of multifamily residential assets. The offering has been fully subscribed with VCBank’s network of investors across the GCC.

Glenbridge Manors is a ‘garden and townhouse-style’ apartment community located within the Northeast Cincinnati / Warren County submarket of Ohio, which is regarded as one of the most desirable residential areas in the Midwest region of the USA. The property is rated as a grade ‘A-‘ high-quality asset with an ‘A-‘ grade superior location.

This family-friendly gated property comprises 274 spacious apartments (ranging from one to three bedrooms) set amid scenic landscaping and supported by extensive amenities. These combine to provide Glenbridge Manors with its unique identity, placing it above comparable properties in the market; while its favorable unit mix appeals to a wide range of potential tenant backgrounds.

Cincinnati was chosen as the location for this latest multifamily sector investment by VCBank and its US partner due to its strong underlying economic and business fundamentals, which are expected to continue during the investment holding period. Home to eight Fortune 500 companies, the city enjoys the fastest-growing economy in Ohio, with a high rate of employment growth in diverse sectors including healthcare, education, government, financial services, manufacturing, retail, and transportation.

Transaction volume for apartments in Ohio increased by nearly 50 percent during the first half of 2018, compared with 17.4 per cent for the Midwest region and 6.7 percent nationally. This indicates that capital is flowing to the Midwest, and particularly to Ohio, at a faster rate than the national average, reinforcing positive sentiment towards the strong fundamentals and proven resilience of the regional multifamily sector. Significantly, there is strong demand for multifamily apartments in Cincinnati, with historical occupancy rates over the past six years averaging above 95 percent.

Commenting on this transaction, Mr. Abdullatif Mohamed Janahi, Board Member and CEO of VCBank, said: ‘Glenbridge Manors marks the Bank’s fourth ‘garden and townhouse-style’ acquisition in the US multifamily sector, in which we have developed considerable knowledge and expertise since 2015. Our portfolio of multifamily properties in Atlanta and Cincinnati now comprises a total of 1,750 housing units.

‘The Bank’s three properties in Atlanta, which were acquired between 2015 and 2016, have performed exceptionally well to date; and have been distributing to investors on a quarterly basis, a yield amounting to an annual cash-on-cash return of 8.5 per cent. Glenbridge Manors is expected to deliver a similar yield,’ he pointed out.

‘We are positive about the US multifamily sector in the foreseeable future due to its strong market fundamentals; together with its demonstrable track record as the real estate most resilient sector to recessions. We are currently identifying further properties in major US metropolitan areas that display robust economic growth and attractive potential for investment,’ Mr. Janahi concluded.