Washington State is planning a $600m (€559.2m) commitment to Evergreen Real Estate Partners.
The pension fund recommended the potential investment at its 1 December private markets committee meeting.
The investment will need to be confirmed at the fund’s full board meeting later this month.
Washington State considers Evergreen Real Estate, overseen by M3 Capital Partners, as one of its top-performing real estate investments.
Since the pension fund began investing in Evergreen 11 years ago, the investment has produced a net IRR of 14.6%.
Washington State has invested $4.1bn with Evergreen to date.
The pension fund is one of the few US public schemes to have established an equity investment strategy in real estate operating companies.
Evergreen Real Estate has a history of placing capital on a global basis and has made several investments with REOCs based in Europe, including Urbanest London.
The company, which looks to build ground-up student housing projects in the UK, has a focus on London.
Its portfolio covers 3,000 units, with three stabilised assets and three in-process developments.
Evergreen has also invested in Centerscape, an owner and developer of German grocery-anchored shopping centres.
Another company in the Evergreen portfolio is Essential Living, an owner of residential properties in London.