REAL ESTATE - The State of New Jersey Division of Investment has approved commingled fund real estate investments totaling $425m.
One of these investments was made with a manager that the pension fund had already made a commitment to. This was with Walton Street Capital. The new commitment was for $25m into the Walton Street Real Estate Side Car Fund V. The institutional investor had already made a commitment of $75m to Walton Street Real Estate Fund V.
Side Car V allows investors to co-invest with Real Estate Fund V on some investment opportunities. This commingled fund is looking at several investment strategies. This includes single asset and asset portfolios, targeted developments, international joint ventures, private equity platforms with strong operating partners and entity recapitalizations.
State of New Jersey made two commitments to opportunity funds. One of these was a $50m investment to the Westbrook Real Estate Fund VII. The pension fund liked the track record that Westbrook Group has had in its previous funds. The gross IRR on the six previous funds for all realized investments has been 24%. This represented $2.6bn of equity invested.
Westbrook looks at real estate investments in the United States and internationally. Some of the markets it looks at are London, Paris, Tokyo, New York and San Francisco. The kinds of deals it looks at include undervalued assets and portfolios and ineffective ownerships.
The other opportunity fund commitment was $100m to Carlyle Realty Partners Fund V. This investment fund will have a total capitalization of around $5bn. This will be achieved through the use of up to 65% leverage. The total equity raise is in the range of $2-2.5bn. Carlyle Realty Partners is the fund manager. It will co-invest up to 5% of the total fund value.
The commingled fund has created a niche strategy of investing in smaller off-market deals in certain markets with strong growth potential and exit liquidity. These areas include New York City, Washington, D.C., California and South Florida.
State of New Jersey made two commitments to core open-ended commingled funds. One of these was a $100m into the Heitman Core Property Fund. This is one the newest open-ended core funds to hit the market.
The investment strategy for the fund is to buy established and leased office, industrial, retail and apartments. These assets would be located in major metropolitan areas across the United States.
The other core fund commitment was for $150m to the Prime Property Fund managed by Morgan Stanley. This commingled fund is one of the older and more established core open-ended funds. It has total net asset value of $3.5bn.
The Prime Property Fund likes to invest in major gateway coastal cities. These would be markets like New York, Boston, Miami, San Francisco, San Diego and Los Angeles. It favors the four main property types of office, industrial, retail and apartments.