By Jon Peterson
San Diego-based Westcore Properties, an active West Coast real estate investor across a number of markets like the San Francisco Bay Area and Seattle, has formed two new separate account relationships that will give the company the ability to acquire $1.25 billion of industrial assets in the future.
The biggest new separate account is with the Arizona State Retirement System, a pension fund that has for over 50 years provided retirement security to Arizona’s public servants, including teachers, municipal workers and other government employees. The pension fund, as stated in an email, has allocated $400 million of equity into the separate account with Westcore. With 50 percent leverage, this relationship will have a total capitalization of around $800 million.
The other $150 million separate account is with an un-named national insurance company, which would provide total capitalization of approximately $300 million. In addition to that funding, an additional $100 million co-investment will be coming from the executive team of Westcore.
“Our investor base has continued to expand and diversify giving us current purchasing power over our near-term deployment horizon,” said Don Ankeny, president and CEO of Westcore, in a prepared statement.
Westcore prior to these new accounts was mainly known as a West Coast investor for its exposure to industrial assets. “We are excited to embark on the next expansion phase of our business targeting new geographies, asset management platforms and asset considerations in the industrial, warehousing and distribution sectors,” said Marc Brutten, chairman of Westcore, in a prepared statement.
Westcore will have investment discretion on the account with Arizona State if it stays within the pre-approved guidelines for the relationship, as stated by the pension fund in an email. The targeted returns for the separate account are at 12.5 percent IRRs over the life of the relationship. Both core and non-core investments will be made by Westcore for the account.