By Jon Peterson
Pension funds are continuing to expand their commercial real estate allocations allocating sizable funds to the sector across the country. Washington State Investment Board (WSIB) is one such pension fund, which just awarded a new $750 million commitment to the Partners Enterprise Capital Holdings LLC, according to information provided by the pension fund in a board meeting investment summary.
The manager of this relationship is Chicago-based Partners Enterprise Capital. This company will deploy the capital into real estate operating companies that are based in the United States. Two of the firms that have already been awarded capital by the manager are San Francisco-based Ark Row Industrial Partners and Newport Beach-based Alere Property Group, as stated on PEC’s website.
Ark Row closed on a purchase of an industrial property at the beginning of this month. The manager paid $15.5 million, or just around $370 per square foot, to acquire 20503 Corsair Boulevard in Hayward, according to public records. The property is a light industrial asset that totals 42,000 square feet. The transaction also included 1.7 acres of excess land within the Corsair Business Park that could be used for future development.
Ark Row only invests in industrial assets that are based in the San Francisco Bay Area. Its current portfolio is located in the cities of Hayward, Fremont, San Leandro, Union City and South San Francisco. The real estate firm plans to acquire existing assets, construct new development projects and set up sale/leaseback transactions, according to its website.
Alere Property Group is known as both a buyer and developer of industrial properties in Southern California. It holds a portfolio totaling 30 million square feet with a gross asset value north of $9 billion, as stated on its website. This includes more than 8 million square feet in the Los Angeles and Orange County infill markets and more than 20 million square feet in the Inland Empire West and East sub-markets.
WSIB has had its relationship with PEC Holdings for a long time. The partnership is the pension fund’s longest-serving real estate intermediary. The investor has produced a net IRR since its inception of 15.4 percent through September of last year and this result spans through three major real estate down cycles over a 23-year period. The pension fund’s total commitment to PEC now totals $5.25 billion.