CBRE creates open-ended US industrial fund with $1.7bn seed portfolio

CBRE Global Investors is setting up an open-ended US industrial real estate fund with a £1.7bn (EUR1.4bn) seed portfolio, according to an investor. The Tennessee Consolidated Retirement System (TCRS) said it plans to invest up to £150m initially in the CBRE US Logistics Partners fund as part of a £250m long-term commitment it has approved to invest in the fund. The US logistics fund’s seed portfolio consists of 11 stabilised and existing buildings and 20 yet-to-be-developed assets.

TCRS told IPE Real Assets that the ability to “deploy capital immediately into a diverse portfolio of this quality, rather than enter a queue which might be a year or longer, makes this an attractive investment option for TCRS”. The fund, which targets up to 50% leverager, expects to generate an 8% to 10% net return. TCRS said it has also made a £250m commitment to Oaktree Real Estate Debt Fund III.

The fundraising target for Debt Fund III is currently unknown, but the manager raised £2.1bn in 2018 for Debt Fund II. The pension fund said it has also put the 349-unit Banner Hill apartment complex in Baltimore up for sale. The property was developed in 2018 as a separate account investment with manager JP Morgan Asset Management.

To read the digital edition of the latest IPE Real Assets magazine click here.