US – Two California-based pension funds have committed capital to an urban investment strategy using commingled funds.
The Los Angeles County Employees’ Retirement Association has made a $60m investment into UrbanAmerica II and the Los Angeles City Employees’ Retirement System will finalise commitments next month to commit $10m to UrbanAmerica II and $40m to the CIM Urban REIT.
The move by these and other US pension funds to an urban investment strategy reflects a discernible shift over the past few years by ‘empty nesters’ and young professionals to city centres from the suburbs.
This evident desire to live near work, shopping and entertainment and avoid commuting has created a need for more housing and retail opportunities. But space for these projects is limited.
Los Angeles County made its decision in conjunction with its real estate consultant The Townsend Group.
UrbanAmerica II is a commingled fund with a total invested capital of $300m. With 67% leverage the total capitalisation will be $900m. The investment strategy is a national one for a mixture of properties including office and retail. Favoured markets will include Phoenix, Philadelphia, Atlanta, Florida, Texas and California.
Los Angles City will approve its investments in December.
The CIM Group has mostly been known as a West Coast player but plans to be more active on the East Coast. It has a history of investment in urban areas. Projects have included housing and retail schemes including ground-up new developments and refurbishment of existing assets.