Wisconsin to invest more than $345m into real estate

NORTH AMERICA – The State of Wisconsin Investment Board (SWIB) has approved real estate investments totalling more than $345m (€268.5m) in 2013.

These commitments are placed in a mixture of core and value-added investments in real estate located across the US.

The core allocations involved buying an existing property and placing additional capital into a separate account debt relationship.

SWIB paid $120m to buy the 431,490 square foot Oakmead West office building in Sunnyvale, California. 

This transaction was completed through a separate account relationship with Deutsche Asset & Wealth Management, formerly known as RREEF.

The pension fund made a new $50m allocation into the Heitman Debt Separate Account II, a separate account relationship with Heitman to originate first mortgages. 

The capital is used to invest in the four main property types of office, industrial, retail and apartments in select markets across the country.

The value-add investment involved buying an existing limited partnership position in a commingled fund, as well as making a commitment to a fund that invests in single-family homes for rent.

SWIB paid $76.2m to buy a limited partnership position in the Beacon Strategic Capital Partners VI, a fund that only invests in office buildings.

The fund aims to improve the value of the properties through a re-leasing or renovation strategies. 

The targeted investment markets are major cities in the US and overseas in London, Paris and Luxemburg.

The pension fund made a $100m allocation to the TCW Home Place Partners II fund, managed by TCW Investment Management Company.

The investment strategy is to buy distressed single-family homes in the US and rent them out to new renters. 

Target markets include California, Georgia, Illinois and Florida.

SWIB has several investments themes planned for real estate in 2013. 

According to a board meeting document, these include selling off a portion of its direct real estate portfolio, de-leveraging its existing portfolio, focusing on stability and cash flow, shifting the portfolio profile towards core strategies and expanding the wholly owned investment portfolio.

SWIB has a real estate portfolio valued at $5.4bn, as of the end of 2012. 

This is split up with $5.1bn in private and $274m in public real estate.