UNITED STATES - New York Common Retirement Fund has made a $285m (€182.1m) commitment to the JP Morgan Star Lake Fund I, which invests in urban real estate across the major US metropolitan markets.
Investing in urban real estate is considered a niche but has gained momentum within many US pension funds, as is the case within this latest separate account relationship between the pension fund and JP Morgan Asset Management.
Many major cities still have an interest in developing or redeveloping its real estate in their urban locations, to meet the demand for new properties from young working professionals who are looking for housing and retail in an urban location, where they can closer to work and shopping.
It is anticipated there could be even more demand in the future for an urban living experience while there are also suggestions high petrol prices could lead other segments of the population wanting a shorter commute to a downtown work location.
The investment strategy for Star Lake Fund I is to place capital into a mixture of urban real estate projects and some of the deals for the separate account will involve the acquisition of an existing property to be redeveloped as new assets.
JP Morgan and New York Common is considering investing some equity into new ground-up development projects in housing and retail though office buildings are also being considered.
Star Lake Fund I is an expansion of an existing relationship JP Morgan has with New York Common. The pension fund has been working with the real estate manager since 1995.