REAL ESTATE - The New Jersey Division of Investment has approved an investment of up to $300m (€235m) into the Prudential Property Investment Separate Account (PRISA).
The fund took this action at its board meeting on September 21, assisted real estate consultant The Townsend Group. The person working on the New Jersey account for the company is Consultant Scott Booth.
New Jersey has accepted that not all of the capital will go into the fund right away. This is a fact that happens with most of the top performing open-ended commingled funds. They have too much capital in their funds and have created investment queues for new investors. These can typically last anywhere from four to 12 months.
New Jersey does not expect that it will be able to invest the full $300m commitment in the foreseeable future. It figures a more likely expectation is $200m. The other $100m could be invested in Prudential Property Investment Separate Account II (PRISA II.).
There are a couple of differences between PRISA and PRISA II. Fund II has more of a value-added component. It does some forward transactions on new development deals. Many of these are done with apartments. Another factor is that PRISA II is not always open to new investors. It is currently closed.
The manager of both PRISA funds is Pramerica Real Estate Investors. The portfolio manager on the PRISA is Allen Smith.
PRISA has been around since 1970. It has a current net asset value of $7.9bn and a gross asset value of $10.1 billion. The performance of the fund has been consistently favorable to the NCREIF Property Index and PRISA’s competitive set.
The commingled fund has a core investment strategy. This equates to mostly investing in established and leased office, industrial, retail and apartments. It has some experience investing in other property types like hotels and self-storage. Its investment guidelines do allow for around 20% of the commingled to be invested in non-core assets. This does include investing equity in new development projects.
PRISA looks to invest in a national portfolio of properties across the United States. These would be in many of the major metropolitan markets across the country.