Private equity real estate firm Taurus Investment Holdings and Aegon Asset Management are teaming up on an environmental, social, and governance (ESG) venture. The firms have entered into a four-year, $600 million venture to acquire value-add multifamily assets and considerably reduce these properties’ energy consumption and carbon output.
Taurus and Aegon AM will manage the investments, and Taurus subsidiary RENU Communities will evaluate and apply its tailored retrofit program to transition the assets to low-carbon, energy-efficient buildings. The initial investment of the equity venture will start with the recapitalization of Canopy Villa Apartments, a 296-unit apartment community built in 1981 in Orlando, Florida.
“Taurus and Aegon AM have made a commitment to building a business that delivers returns to our investors while also positively impacting both society and the environment, so it only makes sense to partner for this substantial decarbonization venture,” said Peter Merrigan, CEO of Taurus. “RENU has already proven to be a leader in addressing carbon emissions in existing buildings, and its work across this portfolio will further show our innovative ability to decarbonize properties in a way that is beneficial to all parties.”
According to the firms, the real estate investments and energy improvements made by RENU Communities will target significant reductions in both energy use and operational carbon emissions, primarily through energy-efficiency upgrades, on-site renewables, and electrification of all services. The benefits are a win-win for the owner and residents, with a lower energy profile limiting the impact of rising energy prices, on-site energy production with solar panels combined with energy storage raising resilience and energy independence, and zero combustion of hydrocarbons translating to better air quality.
“The strong return potential and durable cash flows of the multifamily value-add strategy paired with this accretive, one-of-a-kind decarbonization initiative aims to set the standard for a new way to approach these investments,” said Alexia Gottschalch, global head of client strategy at Aegon Real Estate and U.S. head of Equity Real Assets. “There is a strong alignment of the Aegon AM and Taurus teams in our focus on investment returns, portfolio construction, and meaningful ESG targets.”
Investment banking advisory firm Evercore Real Estate Advisory acted as the financial adviser to Taurus on the transaction.