LBA Realty to close $1bn industrial fund by year-end

LBA Realty’s planned $1bn (€893m) fundraise for its latest value-add logistics fund is expected to close this quarter, according to the Orange County Employees’ Retirement System (OCERS).

OCERS, which had planned to add an industrial specialist to its fund manager line-up, said in a board meeting document that it has approved a $100m commitment to LBA Logistics Value Fund VII.

The decision, recommended by its consultant The Townsend Group, is to help increase the pension fund’s weighting to industrial real estate, a property type expected to continue to outperform the broader market.

The investment will also increase the pension fund’s exposure to US West Coast real estate, which Fund VII is largely focused on.

LBA Realty has raised $325m and was expected to close a further $400m in capital commitments in September.

IPE Real Assets also understands that the Los Angeles City Employees’ Retirement System has also recently made a $35m commitment.

The LBA Realty fund will invest mostly in existing non-core distribution warehouses, light industrial assets and business parks.

Around 25% of the fund could be invested in developments, ‘high infill’ and last-mile logistics locations, cold storage and high-throughput locations.

The fund is expected to seek low-to-mid-teen net returns.

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