Lennar Corp. subsidiary LMC and CPP Investments, the investment board of the Canada Pension Plan, have formed a nearly $1B joint venture to develop apartments in a number of high-growth U.S. markets.

The partners are making an initial equity investment of $979M in the JV, with CPP Investments owning a 96% stake while LMC will hold the remaining 4%.

The partners will begin development with five projects: one property in Boston, one in Miami and three in Denver. Altogether, the new developments will total 1,371 units.

"This joint venture specifically targets high-growth markets where the housing supply hasn't kept pace with renter demand," LMC President Todd Farrell said in a statement.

All three of the initial markets for the JV have experienced multifamily demand growth in recent years, according to Marcus & Millichap data from the end of 2021. The overall multifamily vacancy rate in Greater Boston dropped from 4.9% in 2020 to 3.2% last year. In metro Miami, vacancies fell from 4.8% to 2.1% over the same period, and metro Denver vacancies dropped from 5.1% to 3.5%.

LMC has a portfolio of about 42,000 apartment units, including those existing and under development, and has closed on two previous funds specializing in the property type: Lennar Multifamily Venture ($2.2B) and Lennar Multifamily Venture II ($1.3B).

As of Q3 2021, CPP Investments' net assets totaled about $550B. About 9% of that total is real estate holdings. During that quarter, the pension fund formed a $1.1B JV with Bridge Industrial to develop U.S. industrial properties and an $840M JV with Greystar to develop single-family rental properties in the U.S., among other major investments.