UNITED STATES - Thomas Properties Group has formed its first green investment fund as pension funds are now turning their attentions to sustainable real estate investments.
John Sischo, executive vice president and director at Thomas, said the High Performance Green value-added fund has already caught the attention of one major pension fund - the California State Teachers' Retirement System (CalSTRS) is lead investor with a a $100m (€70.9m) commitment to the commingled fund.
"We think there that are many pension funds and other institutional investors looking to place some capital into a green strategy. We will be one of two managers that have formed a green fund with major pension fund capital. The other is Hines and CalPERS," said Sischo.
Thomas is hoping raise total equity of $250m-$300m, to invest in US office buildings and residential properties as either new development projects or existing properties in need of improvement.
Perhaps more importantly, green materials such as recycled products, will be used on property developments.
Two office building assets in development have already been placed in the fund - one is in Austin and the other is in El Segundo, California.
All deals for the fund are expected to produce mid-teens leveraged IRR, assuming a 5- 10-year holding period.
David Gottfried has been as a senior vice president of sustainable development to oversee responsibility of the new commingled fund, having previously founded of the United States and World Green Building Councils.
Thomas Properties already has a traditional value-added office buildings joint venture with CalSTRS to which the pension fund recently issued a new $150m commitment.