Tag: LaSalle Investment Management

Maryland Pension Fires REIT Manager, Will Transfer $311 Million Portfolio To New Firm

businessman holding small model house in his hands

The Maryland State Retirement and Pension System is shaking up its domestic REIT portfolio as the fund has fired LaSalle Investment Management and will shift its $311 million domestic REIT portfolio to State Street Global Advisors.

From IPE Real Estate:

Maryland State declined to comment or provide a reason for the decision, while LaSalle failed to respond.

The $311m (€244m) domestic REIT portfolio will be transferred to State Street Global Advisors (SSgA), with a global investment strategy for REITs, benchmarked against the FTSE/EPRA NAREIT Developed Index.

Maryland State said it had a long relationship with SSgA across passive equities, core fixed income and EMD.

The pension fund also uses Morgan Stanley as a global REIT manager for a $387.6m foreign portfolio, also benchmarked against the FTSE/EPRA NAREIT Developed Index.

Maryland State has approved a $50m commitment to CBRE Strategic Partners US Value Fund VII.

CBRE Global Investors is raising $1.5bn for the US-focused fund, in which it will co-invest a maximum $30m.

The fund, which will invest in the office, industrial, hotel, retail and apartment sectors, has a targeted 15% gross IRR and a 12.8% net.

The pension fund has made nearly $280m in commitments to CBRE Investors since 2007.

The Maryland State Retirement and Pension System manages nearly $45 billion in assets and allocated 6.9 percent to real estate.

Virginia Pension Commits $200 Million To Industrial Properties

warehouse

The Virginia Retirement System (VRS) is committing $200 million to a joint venture with LaSalle Investment Management that seeks to build industrial warehouses in the United States.

From IPE Real Estate:

The pension fund told IP Real Estate it was committing $200m in equity to the LaSalle VA Industrial JV.

The partnership will develop industrial warehouses in select US markets. Virginia would not comment on which markets the venture would focus on.

LaSalle said it would focus on opportunities to develop and lease large, modern distribution buildings in major population centres with strong transportation infrastructure.

LaSalle recently announced it had been awarded a mandate from a large US public pension fund, an existing client.

Jason Kern, chief executive of Americas at LaSalle, said end-user demand for industrial real estate is “very strong”, driven by growing GDP and global trade, as well as the need for “modern buildings part of an efficient supply chain”.

According to the firm’s research and strategy team, the availability rate for industrial supply has dropped 2.2% since the end of 2012 and 4.2% since 2010. LaSalle is forecasting annual rental growth of 3%. Internet retailing and larger multinational retailers’ focus on improving supply-chain efficiencies are also improving demand.

Virginia has existing exposure to industrial real estate, with 15.6% of its private real estate portfolio invested in the sector at June this year.

Real estate assets make up 10.5 percent of the VRS portfolio. The fund manages $65 billion of assets.