Pennsylvania Teachers’ Pension Commits $150 Million to Industrial Real Estate

Pennsylvania

The Pennsylvania Public School Employees’ Retirement System (PSERS) has invested $150 million in the Cabot Core Industrial Fund.

From IPE Real Estate:

Pennsylvania Public School made the commitment based on strong operating fundamentals for industrial properties, with the sector enjoying its lowest vacancy rates since 2001 and rents rising 4% year on year.

The fund is Cabot’s first core vehicle, having previously invested in industrial properties through value-add funds.

Pennsylvania Public School participated in the funds with a $100m commitment to Cabot’s Industrial Value Fund III in 2008 and $75m to the Industrial Value IV in 2013.

Cabot has been active in Atlanta, Chicago, Dallas, Florida, Los Angeles, New Jersey and Pennsylvania.

Courtland Partners, which advises Pennsylvania Public School, said the fund would target net returns of 8-10%, with an initial current yield of 5-6%.

Around 70-80% of returns are expected to come from current income, with the balance from appreciation.

PSERS managed $51.9 billion in assets as of September 30, 2014.

 

Photo credit: “Flag-map of Pennsylvania” by Niagara – Own work from File:Flag of Pennsylvania.svg and File:USA Pennsylvania location map.svgThis vector image was created with Inkscape. Licensed under CC BY-SA 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Flag-map_of_Pennsylvania.svg#mediaviewer/File:Flag-map_of_Pennsylvania.svg

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