The Tennessee Consolidated Retirement System is investing in a Washington DC office asset, its first separate-account acquisition with BlackRock.

The $118.6m (€107.3m) planned purchase of the 212,000 sq ft Franklin Tower building, at 1401 Eye Street Northwest, is expected to complete this month, according to an email received from the pension fund. 

BlackRock, which declined to comment, and L&B Realty Advisors were hired as core separate account managers in late 2013.

The expected price of the property would result in the pension fund’s paying around 20% less than replacement cost.

Tennessee sees potential for improvement in the Washington DC office market. 

The pension fund wrote in an email that the market had been slow in recent years but that it believes this to be temporary due to low supply.

DC has experienced significant population increase, particularly among Millennials.

Tennessee also uses Clarion Partners, JP Morgan Asset Management, Deutsche Asset & Wealth Management, Cornerstone Real Estate Advisers and TA Associates.

Capital is available on a case-by-case basis, with no manager awarded a specific amount of capital.

All transactions will be in the US and mainly involve the major property types of office, industrial, retail and apartments.