UNITED STATES - New York State Teachers Retirement System has ended an arrangement with Citigroup Alternative Investments as the REIT manager is pulling out of this space.
Pension fund officials say Citigroup intends to discontinue its investment advisory business in this segment of the real estate market so NYSTRS decided at its 29 January board meeting to end the separate account relationship which was worth $63m (€48.2m) at end of September 2008.
The pension fund had pursued a ex-US global REIT strategy with Citigroup, and it is unclear how much of the separate account with Citigroup will be distributed to the pension fund's other REIT managers: Adelante Capital Management, Cohen & Steers, RREEF, European Investors and LaSalle Investment Management.
Elsewhere, however, NYSTRS is to provide $43m of first mortgage financing on three-property retail anchored shopping centres in Jacksonville, Florida and two in Virginia, in Manassas and Charlottesville.
The seven-year loan was placed directly and without the assistance of a real estate manager, at an interest rate of 6.85%.
These properties were acquired in October 2008 by a partnership of the Oregon Public Employees Retirement Fund and Regency Centers Corporation, for $83.4m and at a weighted average cap rate was 7.14%.
And NYSTRS has also agreed to beginning marketing for the possible sale of 919 Third Avenue in New York City - a joint venture arrangement with SL Green Realty Corp.
The sale will only take place if both parties agree the property is being sold at an acceptable price, though the value is to be determined at a later date.
The office building has been in the pension fund's portfolio since December 2001. The 1.45 million s.f. (0.092903m2) asset was built in 1971 and was 100%-leased through the end of September of 2008.
NYSTRS had a total REIT portfolio valued at $1.5bn by the end of September 2008.