State Teachers Retirement System of (STRS) Ohio has raised its target allocation to real estate from 8% to10%, the pension fund disclosed in a board meeting document.
The pension fund’s increased allocation target will likely lead to more acquisitions and new fund commitments, mainly targeting residential, industrial and necessity-oriented retail properties.
Residential investments may include both undervalued apartments and single-family rental properties.
STRS Ohio expects to carry out real estate acquisitions directly, without relying on external separate account managers, an approach that places it among a small group of large US pension funds using such a strategy.
The pension fund expects to rebalance its US real estate portfolio by reducing exposure to assets in the Midwest and East through targeted property sales, while increasing holdings in the South and West through new acquisitions.
STRS Ohio also plans to expand its investments in public real estate investment trusts during the first quarter of the 2026 fiscal year which started on 1 July.
The pension fund said it intends to make three to six commitments to funds, targeting either international real estate or its opportunistic real estate portfolio.
The commitments will be directed toward niche managers operating in major markets and investing in property types that complement the pension fund’s existing holdings.
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