Oregon Pension Fund Allocates $250MM for Apartment Investments with Bay Area Among its Targeted Markets

By Jon Peterson

As the multifamily market continues to drive interest from private and institutional investors, more investment dollars seem to be allocated in that space for acquisitions. One of those investors is the Oregon Public Employees Retirement Fund, which has made a $250 million equity allocation into a new separate account with New York City-based Abacus Capital Group to invest in apartments on a nationwide basis, according to information provided by the pension fund.

Two of the planned targeted markets for the separate account will be the greater geographic areas of the San Francisco Bay Area region as well as Seattle’s Puget Sound region along with a number of other markets across the country.

The overall investment plan for the separate account is to invest in mid-market assets, which will include placing capital into properties that are located outside of urban areas. The transactions for the account will include both buying existing assets and investing in new development projects.

Oregon Public Employees Retirement Fund is expecting that some of these deals will take Abacus longer to find for the account, given the uncertainty and the slowdown in transactions that have resulted from the COVID-19 pandemic. “We do believe that there will be a longer timetable to find transactions for the account,” says Tony Breault, senior real estate investment officer for the Oregon State Treasury, which makes investment recommendations for the pension fund.

Most of the capital for the account will be invested in existing assets, since the separate account is considered to be a core relationship. The leverage amount placed on the account will be 45 percent on a portfolio basis. Abacus will have investment discretion on the relationship, so that the manager can make any final decisions on its own without needing any approval from the pension fund.

Abacus will invest in both A and B Class properties for the fund, and these investments will be completed on a long-term basis. “I would expect that the transactions completed for the account will be held for in excess of seven years,” said Breault.

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