Behringer Harvard's Multifamily REIT I has three multifamily properties that are nearing completion that were developed by Fairfield Residential. Fairfield Residential filed for bankruptcy this morning. To Behringer's credit, it looks like it has made moves to limit the impact of Fairfield's bankruptcy. It is worth reading Multifamily's recent 8-K filings. The complexity of Multifamily amazes me every time I read one of its 10-Qs. In a nutshell, the REIT invests in apartment developments via mezzanine loans that are then converted to equity, although Multifamily is now buying existing apartments.
The complexity is detailed here in an 8-K filing regarding of the properties being developed with Farifield:
Parties. The Baileys Project is owned by Behringer Harvard Baileys Project Owner, LLC (“Baileys Project Owner”), which is solely owned by Behringer Harvard Baileys Investors, L.P. (“Baileys Investment Partnership”). Baileys Investment Partnership is owned by Behringer Harvard Baileys GP, LLC (“Baileys GP”), by Behringer Harvard Baileys REIT, LLC (“Baileys REIT”), by BREOF Baileys, LLC (an equity investor unaffiliated with Fairfield Residential or us) (“BREOF Baileys”), and FF Investors III East LLC (an affiliate of Fairfield Residential) (“FF East”). Baileys Venture owns 99% of the economic interest in Baileys REIT and manages Baileys REIT. Baileys GP, the general partner of Baileys Investment Partnership, is wholly owned by Baileys REIT.