New Jersey Division of Investment is planning to invest as much as $200m (€189m) in real estate in 2017.
As of October last year, the pension fund had allocated 5.89% to real estate.
The target for 2017 is 7.25%, with the ability to go as low as 2% and as high as 13%.
It is likely that the capital will be invested through two fund investments, since the pension fund has often made commitments of $100m or more.
Funds and co-investments have been the most commonly used approach by the pension fund in recent years.
New Jersey has invested in both debt and equity real estate funds in the US and abroad.
The pension fund has been investing mainly in non-core opportunities through funds that have invested in single property types, such as industrial assets, as well as multi-sector funds.
New Jersey had a real estate portfolio valued at $7bn in October last year, with $5.5bn in real estate equity and the balance in debt.
