JP Morgan Asset Management’s open-ended core US real estate fund has sold more than $3bn (€2.59bn) of office and retail assets since the start of the COVID-19 pandemic and no longer has a redemption queue.
The JP Morgan Strategic Property Fund, which has experienced a number of redemptions from US pension funds – most recently involving Arkansas Teacher Retirement System – has managed to rebalance its portfolio and stem some outflows.
According to a report disclosed by the Alaska Retirement Management Board (ARMB), the fund has sold $3bn of office assets since the onset of the pandemic, with a further £450m under contract. A further £500m of retail assets have either been sold or are under contract.
The sales and new capital raised have enabled JP Morgan to resolve an exit queue that at its peak was more than $1bn.
ARMB is among pension funds that have decided not to exit the fund. It will retain its $159.5m investment in the fund after cancelling a redemption request.
According to a board meeting report, ARMB’s made the decision due to “a change in market conditions and a desire to maintain exposure with a manager in good standing”.
Assets by JP Morgan sold included office buildings in Seattle, Boston and Dallas, according to sources familiar with the fund, while retail properties sold were located in Southern California.
The fund is seeking to make new investments in industrial real estate and single-family rental property.
It teamed up with Black Creek in 2018 to invest $400m in industrial property and has since set a target to increase the size off this joint venture to $1bn.
JP Morgan is also expanding the fund’s single-family joint venture with American Homes 4 Rent into new markets, including Nashville, Atlanta, Charlotte, Salt Lake City and Phoenix.