REAL ESTATE – The State of Wisconsin Investment Board has made real estate investments totalling $265m (€200.5m) in three separate events.
The most recent of these investments was a $75m commitment to the Cornerstone Apartment Ventures III. This is a commingled fund that is managed by Cornerstone Real Estate Advisers.
The total equity raise for the commingled fund is projected to be around $400m. Mass Mutual Life Insurance Company, which is the parent company of Cornerstone, will be making at least a $25m co-investment to the commingled fund.
Apartment Venture III is a value-added commingled fund. It will look at investing in existing properties that need to be improved and placing equity in new development projects. Some of the markets it will be seeking deals in include New York, Seattle, Washington DC, Los Angeles and Boston.
The investment board has made a $50m commitment to the CASA Partners IV investment fund. This is a commingled fund that is managed by Henderson Global Investors.
The real estate manager is hoping for a total equity raise of $200m. The amount of leverage placed on the fund will be up to 75%, which will give the commingled fund a total capitalization of around $400m.
Investors in the fund are projected to achieve a leveraged IRR of 12% to 14%. This return factors in a five-to-seven year holding period.
The investment strategy for the apartment commingled fund is mostly to invest in properties that are financed through industrial revenue bonds. This would typically be properties that are of at least 200 units. There are no pre-specified assets in the fund. Most of the properties that it looks at were built in the 1980s. Transactions are considered on a nationwide basis.
Wisconsin has invested $140m of equity into a joint venture with IDI. The pension fund made this investment through its separate account real estate manager, JPMorgan Asset Management.
The investment strategy for the venture is to invest in industrial properties in the major industrial markets across the country, like southern California, Dallas, Chicago, Atlanta and northern New Jersey. There is a three-year investment period to find all of the assets for the joint venture.
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