REAL ESTATE - The Oregon Public Employees' Retirement Fund made two real estate moves at its recent board meeting. It invested $150m into the Keystone Industrial Fund and established a value-added category for its real estate investment program.
Last autumn the pension fund sold half of its Columbia Industrial portfolio to American Realty Advisors. The sales price was $225m. There was a total of 4.2m sq ft of properties involved in the sale.
The manager of the Keystone Industrial Fund is KTR Capital Partners. KTR is hoping for a $500m equity raise for the fund before closing it in February. One of its other major investors is the Pennsylvania Public School Employees Retirement System with a stake of $100m.
Investors in the fund will achieve IRRs in the 13% to 15% range. KTR will co-invest to the tune of 5% of the aggregate capital committed. The fund will invest in industrial properties that have current vacancy issues or near-term rollover and will reposition negative assets. The markets targeted will include New Jersey and the southwest.
Oregon’s value-added department will account for 20% of its real estate portfolio. This equates to $800m. Core assets will account for 50% of the portfolio and opportunistic 30%.
Oregon is now looking to invest some capital in the value-added area. Some of the niche opportunities it will be considering are medical office buildings, public storage, student housing and senior housing.
Oregon’s real estate portfolio has a current value of $5.5bn. The pension fund’s total assets stand at $57bn.
