NORTH AMERICA – The New York State Teachers Retirement System (NYSTRS) has signed an agreement to exit the IN Retail Fund joint venture with Inland Real Estate Corporation.
The pension fund is planning to offload its 50% interest in the JV for $121m (€93.5m) some time this summer.
According to an email from an Inland spokesman, the sale of NYSTRS's interest was actually the company's idea.
Mark Zalatoris, president at Inland, said: "The opportunity to acquire the NYSTRS's interest at this time advances our strategic goals to increase the size and quality of our consolidated portfolio, simplify our ownership structure and strengthen our balance sheet."
The value of the total assets in the IN Retail Fund is pegged at $395.m.
This includes total current outstanding mortgage debt of approximately $152.2m.
The cap rate on the sale of the NYSTRS interest is projected to be 6.7%.
This return is based on a forecasted net operating income for the 12 months following the acquisition of the portfolio, according to Inland.
NYSTRS and Inland Real Estate first formed the JV in 2004.
In total, NYSTRS invested $116m of equity, while Inland contributed eight properties and around $48m of equity.
Portfolio leverage on the assets is approximately 50%.
Most of the assets in the IN Retail Fund are located in the Chicago area.
The JV with NYSTRS and other financial partners has been a big factor in the growth of Inland.
Zalatoris said: "The joint ventures we have established with institutional partners such as NYSTRS have been instrumental in advancing our growth projections.
"Since the formation in 2004, the IRC-NYSTRS joint venture has added more than $300m in gross value to our portfolio and provided $8.5m in high-margin fee incomes as of 31 March."