REAL ESTATE- Teacher Retirement System of Texas will be looking at $925m (€692.3m) worth of real estate investments at its April board meeting.
These will be commitments with new and existing real estate managers. A new manager that it will be investing with is Tricon Capital Group for its next commingled fund, Tricon IX, L.P.
Texas Teachers will be the lead investor for the fund with a commitment of $125m. Its allocation will allow the manager to go out into the marketplace and raise capital from other investors.
The pension fund was assisted in this commitment by its real estate consultant, The Townsend Group. Rob Kochis, a principal with the firm, works on the Texas Teachers account.
He said: "This is a contrarian investment. The single-family market is going through a slow time. We believe there could be some good investment opportunities as some large builders look to get some land off their balance sheets."
The commitment by Texas Teachers will be its first investment into a dedicated single-family fund. The total equity raise for Tricon IX is $600m. Tricon Capital will be making a $4m co-investment to the fund. The investment strategy is to provide equity and mezzanine debt to residential developers. It only will look at assets in the United States. This would include deals on the East and West Coasts and in Chicago.
Texas Teachers will be considering making a $300m commitment to Blackstone Real Estate Partners VI. This would be second time that the pension fund had invested with Blackstone Real Estate Group. It had invested in Real Estate Partners V.
Real Estate Partners VI is an opportunity fund. The total equity raise is around $8bn. Public to private transactions are part of the equation. It also will be buying office buildings, hotels and making international investments.
Texas Teachers will be looking at making $200m commitments to two commingled funds that are managed by Pramerica Real Estate Investors. These are Prudential Property Investment Separate Account (PRISA) and Prudential Property Investment Separate Account II (PRISA II).
PRISA is an open-ended core commingled fund with total assets in the $9bn to $10bn range. PRISA II is an enhanced return fund with $6bn in gross assets. A portion of its strategy is to issue forward commitments for the development of future properties.
The final real estate commitment was to increase the pension fund’s investment in the BlackRock Diamond Property Fund from $100m to $200m. This is a value-added open-ended commingled fund that is managed by BlackRock Realty.
The commingled fund only invests in assets in the United States. These are with the main property types of office, industrial, retail and apartments. The real estate manager buys existing properties that it can improve a rehab or renovation. Total assets in the commingled fund are in the range of $400m to $500m.