NORTH AMERICA – The Connecticut Retirement Plans and Trust Funds will be considering a $100m (€75m) commitment into the USAA Eagle Real Estate Fund for its 10 July board meeting.
A gross IRR of 11.7% is expected over the first three years the commingled fund is open for business.
The fund is to invest solely in US assets, located primarily in Atlanta, Houston, San Francisco and Washington, DC.
USAA will be investing in both core and non-core properties for the Eagle Fund, including a combination of office, industrial, retail and apartments in major growth markets.
Connecticut is looking to place additional capital into real estate through core, value-add and opportunistic sectors.
The long-term plan is to have core be 50% of the portfolio and the other two strategies 25% each.
The pension fund had a real estate portfolio valued at $1.3bn, as of the end of 2012.
This and $374m of unfunded commitments puts total real estate assets at $1.65bn, or 6.5% of $25.3bn in total plan assets.
This leaves Connecticut with $124m of additional capital to invest before it reaches its 7% targeted allocation for the asset class.
In other news, the Maine Public Employees Retirement System (Maine PERS) has approved a $25m investment into the High Street Real Estate Fund IV, a commingled fund managed by High Street Equity Advisors.
The manager has an investment strategy of buying core industrial properties along the US East Coast.
Its properties must have an occupancy level of at least 80% and be built by 1980 or later.
The company’s targeted markets include Chicago, Dallas, Atlanta, Northern New Jersey, the metropolitan area of Philadelphia, Houston and Baltimore/Washington, DC.
Lastly, Almanac Realty Investors has made a $100m investment into Shaner Hospitality Finance, an investment entity to be managed by Shaner Hotel Group and will be a debt/equity source for hotels.
Shaner will be looking to employ a variety of investment structures, including refinancing, the purchase of existing loans and preferred equity infusions for acquisitions.
For the most part, deals will involve a mixture of hotels that have a premium, full-service or select-service flag and are located on the East Coast.
Pike Aloian, a principal with Almanac, said: “Shaner has a proven track record investing in hotels. The past couple of years had been a tough period for hotel owners. Many of the banks that had been traditional lenders are no longer providing this capital. This should lead to some strong investment opportunities for Shaner.”
Almanac made the investment for its commingled fund, Almanac Realty Securities VI.
It raised $820m for the fund with a final close in 2012.
It has now invested around $450m of this capital in the market.