UNITED STATES - The Florida State Board of Administration has appointed Pramerica Real Estate Investors to manage the last 15% of a separate account previously managed by Morgan Stanley Real Estate.
The portfolio of senior living assets is valued at $377.5m (€263.4m) and pension fund officials say Pramerica was selected based on their experience with the asset type and related operating entities.
The Florida State portfolio consists of 34 properties with a variety of age and occupancies, and they include a combination of independent assisted-living and skilled nursing homes.
The assets are spread out across the US in California, Washington State, Colorado, South Carolina, Florida, Ohio, Kentucky, Massachusetts and Rhode Island.
The move was necessary as Morgan Stanley made a decision at the end of 2008 to exit the separate account business and concentrate its expertiseon the commingled fund side of the business through its MSREF series.
Many pension fund managers in the US are looking at the takeover business as the only possible way of growing assets under management in 2009. The acquisition market has all but dried up with very little debt capital available to fund any new purchase activity, and managers are waiting for assets to stop dropping in value before they can consider buying new properties.
Pramerica is also in the process raising $400m in capital for its Senior Housing Partners IV fund, and has received a $25m commitment from Pennsylvania State Employees Retirement System to the commingled fund.