​Ohio Bureau of Workers places $200m into core real estate

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  • Columbus, Ohio

The Ohio Bureau of Workers Compensation Board is to invest $200m (€183.3m) in core, open-ended real estate funds.

The US pension fund allocated $100m to Invesco’s Core Real Estate USA fund and $50m each to Heitman’s America Real Estate Trust and the Cornerstone Patriot Fund, according to documents.

The new commitments by Ohio BWC are part of an increased real estate allocation of 12% approved in February.

Ohio BWC has now invested $200m in the Invesco fund. On the first $100m, Ohio BWC earned an 11.93% return since July 2013.

The Invesco USA fund had a net asset value of $6.2bn at the end of last year, with a loan-to-value ratio on the portfolio of 19.58%.

The fund, which has a current entry queue of $122m, invests at least 85% of its portfolio in core US assets.

Invesco can invest up to 15% in a value-added property strategy. Recent deals include a retail property in Los Angeles, bought for $40m, and a high-street retail asset in Chicago for $14m.

Heitman’s fund is diversifying by property type and economic exposure, buying assets in infill locations with major metropolitan areas.

The fund has some exposure to non-traditional core assets, such as a recent follow-on investment to a self-storage portfolio for $122.4m.

This fund, which has net asset value of $4.5bn, has a currrent entry queue of $939m.

Cornerstone’s Patriot Fund has a net asset value of $2.6bn.

The fund’s recent deals included a $192m investment in an office and retail complex in Florida.

No less than 90% of the portfolio is invested in core assets, with an option to invest up to 10% of the fund in value-add deals, such as lease-up, development, repositioning and to-be-built ventures.

Ohio BWC’s has allocated 7% to core investments, 3% to core-plus and 2% to value-add.

Responses to the core-plus RFP were due on May 14, with investor and real estate consultant RVK due to make a final decision at the pension fund’s October board meeting.

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