By Jon Peterson
The Oregon Public Employees Retirement Fund will continue to seek investment opportunities in commercial real estate across a number of markets throughout the country. The fund has awarded a new $300 million allocation to Denver-based Ascentris to expand the pension fund’s existing separate account with the manager, according to information verified by the pension fund. The investment strategy will focus on a mixture of office, industrial and apartment assets.
“Our investment strategy is a very flexible mandate both from a property type and market perspective. Both San Francisco and Seattle are on our list of target markets, amongst a number of others,” says Anthony Breault, senior real estate investment officer for the Oregon State Treasury, which oversees the investments for Oregon PERF. “Currently, we will be focused on growth markets, both in primary and secondary regions across the United States.”
From a property type standpoint, the separate account can invest in a variety of property types that includes a mixture of office, industrial and apartments. “The emphasis for now is for mixed-use and logistics assets,” said Breault.
The account with Ascentris has a two-sleeved investment structure. The transactions can be either value-add/pre-stabilized or core/stabilized properties. “Ascentris works closely with our staff to understand where our portfolio has gaps or exposure needs in terms of both property types and geography and then focuses their efforts on sourcing deal flow in those markets,” said Breault.
The new allocation by Oregon PERF will give the pension fund the capability to invest up to $600 million worth of assets in the next few years. This will happen as the new allocation has a leverage component of 50 percent. The transactions for the new capital will include a mixture of buying some existing assets and developing new properties.
The relationship between Oregon PERF and Ascentris dates back to 2013. The pension fund has a value on the account’s current portfolio at $199.5 million, according to information from the investor’s website. This portfolio has produced an IRR of 12.58 percent on the current properties.
Ascentris as a company has invested previously in both the San Francisco Bay Area and Seattle, according to the manager’s website. It owns properties in the East Bay and San Jose in the Bay Area and in the Capitol Hill and South Lake Union submarkets in Seattle.