REAL ESTATE - The New York State Teachers Retirement System has approved real estate investments in two commingled funds outside the US.
One was a €28m commitment to the CB Richard Ellis Strategic Partners UK Fund III. The other was a €40m in euros investment into the CB Richard Ellis Strategic Partners Europe Fund III. The pension fund approved these transactions at its board meeting on January 25.
NYSTRS believes that both commitments will give it further diversification within its overall real estate portfolio.
The pension fund considers that both investments will be part of its opportunistic real estate strategy. It anticipates these commingled funds with produce a gross IRR of 20%. This return factors in a three- to seven-year holding period.
The real estate manager on both commingled funds is CB Richard Ellis Investors. The person overseeing both fund is Mike McMenomy, global head of investor services.
UK Fund III is a commingled fund that will invest in all of the main property types. This includes office buildings, industrial properties, shopping centers and apartments. The strategy is to invest in existing assets that can be improved by a new leasing strategy, better management or redevelopment.
The commingled fund is targeting properties that are major cities outside of the central business district of London. These would include places like Birmingham, Manchester and southeast of London.
Europe Fund III looks to invest in properties in more than one country. It wants to buy assets that are located in the large metro areas of France, Germany and Italy.
The commingled fund aims to buy all of the main property types of office, industrial, retail and apartments. It too will focus on existing assets that can be turned around.
