NORTH AMERICA - San Diego City Employees' Retirement System has voted to commit $20m (€16m) into the CBRE Strategic Partners US Value VI commingled fund at its 28 June board meeting.

In a memo for the board, Hewitt EnnisKnupp, San Diego City's real estate consultant, pointed out that the fund would not be teaming up with any joint venture operating partners, thereby removing an extra layer of fees.

Assistant investment officer Jamie Hamrick also cited the fact that CBRE Global Investors had CB Richard Ellis as its parent company, giving the real estate manager access to services, deal sourcing and market research.

US Value VI is a non-core investment fund that will convert under-managed or distressed assets, convert them to core and sell them. 

All four of the main property types will be considered for investment. 

Investors in the fund are projected to achieve 14-16% gross IRR, before fees have been paid.

The total equity raise is $725m. There will be 60% leveraged placed on the portfolio, giving the fund a total capitalisation of $1.8bn.

CBRE has already invested $224.3m of equity for the commingled fund in six deals. 

These were repositioning/leasing deals in Atlanta and Los Angeles, and four apartment transactions in Denver and Baltimore.

San Diego City has a total real estate portfolio valued at $526.8m as at the end of May. 

These assets make up 10.5% of its $5bn in total plan assets. 

Its targeted allocation for real estate is 11%.

Topics