Maryland State Retirement & Pension System, Baltimore, sold the last properties held in its direct equity real estate program to focus on commingled real estate funds.
“We plan to invest in commingled funds offering greater diversification across property types and geographies,” A. Melissa Moye, chief investment officer, said in a statement Thursday.
The $36 billion retirement system had a direct equity real estate program for 20 years. Based on recommendations from consultants at PCA Real Estate Advisors, the board of trustees' investment committee decided in 2009 to sell the portfolio's nine properties in Maryland and Georgia, which were limited to office and retail properties.
The system has a 10% target allocation for real estate, with current investments accounting for 5.5% of the total portfolio.
“We are trying to move up to our target, and we'll be making investments in commingled funds when it makes sense,” spokesman Michael Golden said in a telephone interview.
The most recent properties sold, all in Maryland, were Kentlands Square Shopping Center, purchased for $35.5 million in 1997 and sold for $74.5 million; Severna Park Marketplace, purchased for $31.4 million in 2002 and sold for $61 million; and Cranberry Square, purchased for $18.9 million in 1999 and sold for $33 million.