UNITED STATES - Florida State Board of Administration has signed contracts to transfer 85% of the $2.7bn (€1.93bn) separate account assets previously managed by Morgan Stanley Real Estate to Heitman, L&B Realty Advisors and Invesco Real Estate.
The remaining 15% of the portfolio will be worked out in August.
Invesco was awarded the management of $1.3bn worth of assets including office, retail and residential properties. It will be assuming responsibility for representing the pension fund in two existing joint venture relationships; both ventures acquire and hold mid-size shopping centres.
L&B has a contract to control an office and residential portfolio valued at $600m. Heitman will manage a $400m retail and logistics portfolio.
According to Florida State officials, the real estate staff considered alternative options and decided the most prudent course and of action was to distribute the pension fund's Morgan Stanley assets to its existing separate account managers. This was based on factors such as the manager's capacity, experience and the compatibility of assets.
Morgan Stanley decided at the end of last year to exit the separate account business to focus on the commingled fund business.
Many real estate managers in the US are planning that the only way to grow its portfolio in 2009 is through takeover business. This is because there are very few acquisitions of properties while a lot of capital sits on the sidelines waiting for values to stop dropping and for some debt capital to become available.