JPMorgan AM’s Americas real estate head to leave firm

Mike Kelly, head of real estate Americas at New York-based JPMorgan Asset Management, the asset management arm of JPMorgan Chase, is preparing to retire after nearly 15 years at the New York-based firm, PERE has learned.

Kelly will be staying on at the firm until early 2024, according to a JPMorgan Chase spokeswoman. PERE understands a successor will be named in the coming months.

“We thank Mike for his dedication and service to JPMorgan and the real estate industry, congratulate him on his many achievements over his long career, and wish him the very best in his well-earned retirement,” the spokeswoman said in a statement.

Since July 2019, Kelly has been in charge of JPMAM’s Americas real estate platform, where he has overseen a 180-person team managing more than $60 billion of assets across core, value-add and opportunistic real estate on behalf of institutional, sovereign and high-net- worth investors.

Kelly’s departure will mark the second change in leadership of JPMAM’s Americas real estate business in less than five years. He succeeded Kevin Faxon, who served as chairman of the platform for more than a year after Kelly ascended to the Americas head role. Faxon left JPMorgan in September 2020 after 32 years and has since launched his own firm, Shadow Hill Partners.

Since Kelly assumed leadership in July 2019, JPMAM’s Americas real estate business has grown slightly in AUM from $65.2 billion to $67.4 billion and in head count from 178 to 204. The Americas continues to account for the vast majority of JPMAM’s global real estate business, which currently manages $80 billion in assets, up from more than $70 billion at the start of Kelly’s tenure as Americas head.

Meanwhile, JPMAM’s flagship real estate fund, JPMorgan Strategic Property Fund, was overtaken last year by Morgan Stanley’s Prime Property Fund as the largest fund on the NCREIF Fund Index – Open‐end Diversified Core Equity. As of September 30, Prime Property Fund had a net asset value of $37.8 billion while Strategic Property Fund had a NAV of $35.3 billion. The latter vehicle was once the world’s largest commingled real estate funds and had dominated the core real estate market for years.

However, the fund’s performance had suffered in recent years, partly because of its historically heavy weighting to two now out-of-favor sectors, retail and office. Strategic Property Fund’s returns trailed that of the ODCE index on a current-quarter, year-to-date, one-year, three-year, five-year, seven-year and 10-year basis as of September 30, according to the fund’s 2022 annual report. As of the end of Q3 2022, the fund had a redemption queue of $3.6 billion, the report showed.

Kelly’s career in private real estate spans more than three decades. Prior to becoming head of Americas real estate, he was the platform’s head of portfolio management from July 2013 through July 2019, and oversaw the portfolio managers for JPMAM’s US real estate funds and separate accounts. From October 2009 until July 2013, he was head of debt capital markets.

Before joining JPMorgan, Kelly was head of real estate conduit and workouts for Citigroup Global Markets from May 2007 to October 2009. From May 2006 to May 2007, Mr. Kelly was a vice president and originator in the large loan CMBS group of Goldman Sachs Commercial Mortgage Capital. From September 1991 to March 2006, he held several roles at New York Life Investment Management, including co-head of commercial mortgage origination.

JPMorgan Asset Management is the asset management business of JPMorgan Chase, the world’s largest bank by market capitalization. As of December 31, JPMAM managed more than $2.4 trillion in assets.