US institutional investor TIAA has acquired a 420,000sqft life-science real estate porfolio in the US for $158m (€134m).
The purchase of the two fully-leased properties – located in Orange County, California, and Madison, Wisconsin – is part of TIAA’s strategy to increase its exposure to alternatives, and life sciences in particular.
The transaction was part of broader sale of assets by IRA Capital to TIAA’s subsidiary Nuveen Real Estate, which includes a $463m portfolio of healthcare assets, reported by IPE Real Assets last week.
While the life-science portfolio will be held on TIAA’s balance sheet, the 27 healthcare assets will be owned by Nuveen’s newly launched US Cities Office Fund, with $234m of debt financing from Allianz Real Estate.
Nuveen now manages a number of open-ended Cities Funds in the US, Europe and Asia-Pacific, which collectively, the company said, allow investors “to efficiently customise their core allocations across the four primary property sectors – multifamily, retail, office and industrial”.
Bill Abramowitz, portfolio manager of the US Cities Office Fund, said: “This is a foundational investment as we launch the fund and will provide immediate scale in a dynamic and growing sector.”
Andrew Pyke, head of healthcare for Nuveen Real Estate, said: “With this transaction, Nuveen Real Estate’s healthcare real estate portfolio is well over $1bn. We have a goal to aggressively grow this sector over the near term, given the strong demographic tailwinds driving demand for quality healthcare space.”
Chad Phillips, global head of office at Nuveen Real Estate, said: “As demographic and economic patterns continue to develop, we see increased healthcare demand in US markets, including treatment, research and manufacturing.
“This will have an expansionary effect on the related real estate, including medical office and life science. Our firm has been investing in these spaces and continues to see compelling opportunities to deploy capital.”
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