REAL ESTATE- The Illinois State Board of Investment has purchased a portfolio of industrial properties through separate account manager CB Richard Ellis Investors for $80.5m (€63.5m) from Bentley Forbes.
The transaction involved the acquisition of five industrial buildings totaling 1.7m square feet. The properties are located in five markets around the country. They are two assets in Raleigh/Durham and one each in Chicago, Boston and Atlanta. They are all considered to be core assets. The portfolio is fully leased to Kuhne + Nagel, a leading world logistics company based in Switzerland.
CB Richard Ellis Investors had its Portfolio Manager Troy Jenkins work on this transaction. He and fellow Portfolio Manager Scott Stuckman oversee the Illinois State separate account.
The real estate manager has had a very active year. Since June 30, the company has acquired $2.1bn worth of real estate in the US and another $3.3bn on a global basis.
Illinois State had selected CB Richard Ellis Investors and Clarion Partners as its separate account managers in the summer/fall of 2005. Each manager was allocated $300m of equity to invest in the marketplace. The amount of leverage allowed on the account is up to 35%. Both of the managers have full investment discretion. This allows them to find and close deals on their own, without any necessary input from the pension fund.
Illinois State has set the investment mandate for both managers to be a core strategy. This means it wants to invest in established and fully leased properties. The pension fund set it up this way as many of its commingled fund investments were more of the value-added variety.
Illinois State looks for office, industrial, retail and apartment transactions for its separate account transactions. It hopes to build up a national portfolio. These assets would be spread around the country in the major metropolitan areas.