USAA announced today that it has agreed in principle to sell a controlling interest in USAA Real Estate (USAARE) to the current management of USAARE and a private investment group. USAA will retain a significant ownership stake in USAARE.
USAA says the move is being made to simplify USAA’s operating structure enabling it to better serve members through its core businesses of banking, auto, home and life insurance, and retirement products. The deal reduces many financial service regulatory requirements for USAARE and allows it to grow in a more profitable way.
“We believe both USAA and USAA Real Estate are best served by creating this strategic relationship and enabling the investment management business to operate more independently,” said USAA CEO Stuart Parker. “We will continue to deliver on USAA’s mission to serve the financial needs of the military community with the quality, speed and service members expect and deserve.”
“We remain as committed as ever to producing great results for USAA and its members,” said USAA Real Estate President and CEO Len O’Donnell. “This change enables us to provide an even greater level of service to our clients and partners as we strive to maximize performance for their portfolios. It creates a deeper and richer alignment between our clients, USAA and the management team, from which all will benefit immensely.”
USAA expects minimal employee impact from the transaction. USAA Real Estate is planning to maintain its current workforce and will work with all parties to ensure a smooth transition.
The transaction is expected to close in early 2020, subject to certain regulatory and other customary Board approvals, conditions and consents.
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