Massachusetts Pension Reserves Investment Management Board has bought a residential asset in Charleston, South Carolina as it looks beyond US gateway cities.
The pension fund paid $63.2m (€50.9m) for the 200-unit Elan Midtown complex at a 4.9% yield.
Tim Schlitzer, senior investment officer/director for real estate and timberland at Mass PRIM, said if the property had been in New York, Boston or San Francisco, the cap rate would have been ”at least 100 basis points less”.
Separate account manager JP Morgan Asset Management bought the asset for Mass PRIM, which is considering other sectors for other high-yielding assets.
“This would be more with apartments and retail and less with office buildings,” Schlitzer said.
The acquisition was one of three recently closed by Mass PRIM for its core separate account portfolio. The fund has now invested $186.3m in the three properties.
JP Morgan bought a 250-unit residential block in Washington DC for $80.4m at a 4.8% yield.
A 404,236sqft industrial property in Dallas, Texas was also bought by Mass PRIM for $42.7m at a 7.2% cap rate. The asset was bought via separate account manager AEW Capital Management.
Mass PRIM has closed 10 separate account deals worth $625.3m this year. The pension fund will continue to use TA Associates as a separate account manager, despite a majority interest in TA being acquired by The Rockefeller Group.
