Tennessee Consolidated Retirement System has enlarged its real estate portfolio by $246m (€195m) through a combination of three separate account acquisitions and two fund commitments.
The separate account acquisitions total $136m in three core real estate investments.
Tennessee bought a 161,042sqft Rosendale Square shopping centre in Minneapolis, Minnesota through Deutsche Wealth & Asset Management. The purchase price was $33.6m, according to industry sources.
The pension fund also bought two industrial buildings in Chicago, Illinois through TA Associates. The two properties total 957,562sqft.
The other separate account deal was through Clarion Partners. The 184,259sqft Westchase Corporate Centre office building in Houston is 93% let.
The two fund commitments were a $50m allocation to the Savannah Real Estate Fund III and a $60m commitment to the Berkshire Multifamily Value Plus Fund III.
Savannah, which invests in office buildings in northeast US and focuses on New York City, is aiming to raise $650m of equity, with a hard cap of $700m and leverage of 65%.
Targeted returns for the value-added fund are 11.4% unleveraged and 18.5% with leverage.
Berkshire is aiming for a total raise of $400m for the fund. The fund manager will make a $10m co-investment.
Fund III will invest in mezzanine debt, asset recapitalisations and development, with properties sourced off-market.
Targeted returns for the fund are 16.5% to 17.5% (gross) and 12% to 13% (net), with leverage on a portfolio basis of 50%.
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