MORE REAL ESTATE: NEW YORK COMMON STRIKING $1.12 BILLION IN REIT DEALS; TWO JOINT VENTURES WILL BE FORMED SOON
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BentallGreenOak agrees to acquire Metropolitan Real Estate Equity
      watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • Multiemployer pension measures cleared for relief bill vote
      The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Eastern Colorado VA Receives Shipments Of Covid-19 Vaccines
      Fidelity looks to speed vaccinations to get workers back to offices
      OMERS CEO Blake Hutcheson
      OMERS records worst loss since 2008 on bad COVID-19 bets
    • DCALTA releases daily valuation tool for alts in DC plans
      PSCA: Employee participation in non-qualified deferred comp plans rising
      Profile of backlit woman against at TV monitor with female symbols on it
      Women outperform men in managing DC plans – Morningstar
      A  Malaysia flag flies in Putrajaya on Sept. 23, 2020
      Malaysia’s EPF ends 2020 up 7.9% at almost $250 billion
    • TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
      Emissions from a smokestack in Poland
      Asset managers facing more scrutiny on ESG issues – report
      Boris Johnson, U.K. prime minister, hosts the U.N. Security Council's virtual meeting on climate change risks in London on Feb. 23, 2021
      Progress in fighting climate change falls short – U.N.
    • Spirit winners
      Prudential honors young people who are helping out
      2 U.K. pension execs take on ESG investing in new podcast
      Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
    • Fidelity registers 17.9% rise in AUA in 2020
      Mellody Hobson
      Ariel’s Mellody Hobson hitting her stride as co-CEO
      Adrian Lee & Partners appoints head of sales and marketing
      Jackson Square Partners out as Vanguard subviser
    • Funded status of largest U.S. pension plans climbs in 2020
      Corporate plan funding ratios get a boost in February – 2 reports
      Silentnight owners settle pension fund dispute with regulator
      A  copy of the Daily Mirror newspaper is removed from the production line at Trinity Mirror's factory in Watford, U.K., on April 13, 2010
      Media group Reach inks buy-in deal for pension fund
    • Adrian Lee & Partners appoints head of sales and marketing
      BlackRock Investment Institute picks global chief investment strategist
      Metlife Investment Management selects new head of real estate equity
      Eric Lane departs Goldman for Tiger Global
    • The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
    • AEW chooses head of fund operations and debt finance
      Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
      David Ireland
      Sponsors returning to questions about in-plan annuities
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      Minnesota taps Albourne as first private markets consultant
      LGPS Central seeks managers for targeted return strategy
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      Minnesota taps Albourne as first private markets consultant
      LGPS Central seeks managers for targeted return strategy
    • Financial Auditing Services
      Actuarial Services
      Emerging Market Equity Manager Services
      Securitized Credit Manager Search
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Investment Trends: Looking Ahead Across Equity Sectors
      Rethinking Market and Reference Data Management
      China is embarking on a new stage of growth
      Gold Outlook 2021
    • Sameer Shalaby
      Commentary: Why should investors care about treasury management?
      David Blitzstein
      Commentary: Without a national retirement policy, Americans face a future of pension crises
      Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top performing managers by category: separate accounts, 4th Quarter 2020
      Graphic: Private funds weathered 2020 turmoil
      Top performing managers by category: commingled accounts, 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
June 14, 1999 01:00 AM

MORE REAL ESTATE: NEW YORK COMMON STRIKING $1.12 BILLION IN REIT DEALS; TWO JOINT VENTURES WILL BE FORMED SOON

Ricki Fulman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    ALBANY, N.Y. -- The $110 billion New York State Common Retirement Fund is about to close on two joint ventures with REITs, said Martin S. Levine, chief real estate investment officer.

    The two deals are valued at $1.12 billion.

    Speaking at the NAREIT 1999 Institutional Investor Forum in New York last week on a panel about investors' perspectives on REITs, Mr. Levine said the pension fund expects to close a deal with Lexington Corporate Properties Trust, New York, in two to three weeks, and another deal with a large warehouse and industrial REIT at the end of July. He declined to name the second REIT until the deal closes.

    When these deals are complete, the system will have nine joint ventures, seven of them with real estate investment trusts, said Mr. Levine, who added he is in discussions with other REITs for at least two more joint ventures.

    In addition, the system two weeks ago closed a deal with privately held Taconic Partners, New York, on the old Port Authority building in New York City, which is valued at $450 million.

    "The strategy in this partnership is to acquire opportunistic office buildings in New York City and on the Eastern Seaboard," Mr. Levine said.

    The Port Authority building fits because there are fiber-optic cables running up and down Eighth Avenue, where it is located, which makes the site attractive to telecom and high-tech tenants, such as MCI WorldCom Inc., which occupies 90,000 square feet in the building.

    The Lexington venture will involve "buying single-tenanted, investment-grade office and industrial properties around the country," Mr. Levine said. The system is committing $100 million and Lexington is committing $50 million, but the two parties will have equal voice in major decisions on sales, investments and refinancing.

    "The key here, as with all these programs, is to team up with partners who can continue to add equity and purchase properties on behalf of the joint venture. And Lexington is expert at that," Mr. Levine said. He valued the deal, which is 65% leveraged, at $425 million.

    The other REIT deal, valued at $700 million, will invest in industrial properties in various markets.

    Mr. Levine said he is in talks with a major developer of central business district properties about teaming up and also wants to do a joint venture with a specialist in multifamily housing.

    In late April, New York State Common announced a joint venture with Kimco Realty Corp., New Hyde Park, N.Y., to launch the Kimco Income REIT, which will acquire high-quality retail properties. New York State contributed $117 million in equity, while Kimco contributed 19 retail properties with an equity value of $105 million plus $12 million in cash.

    Kimco and the New York fund "believe this program can grow to several million dollars of neighborhood strip, community and power centers," Mr. Levine said. The plan is to take the new entity public.

    Partnerships between pension funds and REITs have become an important trend in the past year, as share prices of REITs have sagged, making it difficult for them to expand or raise cash on their own. They have turned to pension funds seeking capital and a number of deals have been struck.

    In recent months, the Ontario Teachers' Pension Plan Board, Toronto, teamed up with Macerich Partnership LP, Santa Monica, Calif., to buy five regional shopping malls in the United States for $75 million. And the $157 billion California Public Employees' Retirement System, Sacramento, made a deal with Burnham Pacific Properties Inc., San Diego, to buy 28 shopping centers for $663.4 million from AMB Property Inc., San Francisco. Burnham and CalPERS created BBP Retail LLC to buy 5.1 million square feet of shopping centers. CalPERS holds an 80% stake in the venture while Burnham has 20%.

    However, New York State Common has been doing joint ventures with REITs since 1995, when it teamed up with General Growth Properties Inc., Chicago, to buy Homart Development Co.'s portfolio of 26 regional shopping centers. There are now 23 centers in the portfolio, which is capitalized at $1.6 billion. New York State's initial investment in the venture was $265 million in equity. Mr. Levine said he migh do a second venture with General Growth, in which both partners would contribute properties.

    The system has committed $1.5 billion to these joint venture programs to date, Mr. Levine said, noting they have been very successful.

    The strategy is a good one for the pension fund because it allows the fund to align its interests with high-quality partners that are making sizable equity contributions, he said.

    Because the pension fund operates with a real estate staff of seven investment professionals, the joint venture arrangement allows Mr. Levine to defer the day-to-day management of properties to the partner, leaving his staff available for other tasks. Mr. Levine also has been able to structure the deals with lower than normal fees to the outside advisers by negotiating.

    The ventures also offer multiple exit strategies, which give the fund options. "We can take them public, or we can convert our stake into stock in the REIT, or use the traditional buy-and-sell strategies," Mr. Levine said.

    A 3-year-old joint venture with AMLI Residential Properties Trust, Chicago, in which the system committed $75 million, was so successful that Mr. Levine asked for an additional allocation of $100 million to expand the program of developing garden apartments in AMLI's seven targeted markets. So far it has developed projects in Aurora, Ill.; Fort Worth, Texas; Indianapolis; and Overland Park, Kan.

    Another joint venture with Hines, Dallas, a privately held international real estate firm, that began two years ago and involved a $250 million commitment, has already produced four investments, Mr. Levine said. Two have closed and two are under construction, but already are fully leased. One, scheduled to be completed in August, is Cedar Court, a 430,000-square-foot, four-building office complex in Redmond, Wash. It is located directly across the street from Microsoft Corp., which has leased the entire complex.

    The other is a building in the Dallas Galleria, which has been leased by Tenet Healthcare.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    How will gold react?
    Sponsored Content: How will gold react?
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Rethinking Market and Reference Data Management
    Investment Trends: Looking Ahead Across Equity Sectors
    China is embarking on a new stage of growth
    Gold Outlook 2021
    Shifting DC Times - Winter 2021
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center