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New Jersey commits $200m to RE

The $69.6 billion pension returned to two previous general partners for its March investments.

The New Jersey Division of Investment (NJDOI) is splitting $200 million between two previous real estate general partners in its latest round of investments, according to materials from the pension system’s meeting on Wednesday.

The pension system wrote a $100 million check to Wheelock Street Capital for its new US opportunistic fund. The Greenwich, Connecticut-based firm launched Wheelock Street Real Estate Fund V earlier this quarter with a $700 million target and a $725 million hard-cap, according to NJDOI. The pension system previously invested $275 million with the firm through two funds and a co-investment vehicle, according to meeting materials.

Wheelock, which has founded in 2008 and has $1.4 billion in assets under management (AUM), is making a 2.5 percent equity commitment to the fund. The firm plans to deploy capital from the fund into a variety of US investments across asset classes, buying individual assets, portfolios and operating companies, according to the meeting materials.

Wheelock’s latest publicly disclosed transaction was the February purchase of the San Diego Marriott Mission Valley hotel for $74.5 million, according to real estate data provider Real Capital Analytics (RCA). The firm bought the 350-room, 17-story property from real estate investment trust Host Hotels & Resorts.

At Wednesday’s meeting, NJDOI also invested with Exeter Property Group, a Pennsylvania-based firm founded in 2006 that has $3 billion AUM.

NJDOI committed $100 million to Exeter Core Industrial Club Fund II, a $600 million vehicle launched earlier this year. The pension plan allocated $200 million to the firm’s predecessor vehicle in 2012, according to meeting materials. Because Exeter’s first fund has been fully realized, NJDOI was under its 12 percent target allocation to industrial real estate before committing to the second fund.

Exeter will continue its investment strategy for its second fund, targeting core and core-plus industrial real estate. The firm plans to deploy 75 percent of the fund’s capital to bulk warehouse and multi-tenant logistics assets and 25 percent to “last mile” distribution properties. About two-thirds of the fund’s capital will be deployed to what Exeter identified as the top 18 US markets. The firm committed 1 percent to the fund, according to NJDOI.

NJDOI’s neighboring pension plan, the Pennsylvania Public School Employees’ Retirement System (PSERS), also allocated $100 million to the fund in December, according to PSERS’ meeting materials.

Exeter’s first vehicle in the series closed in December 2011 at $404 million. That vehicle had a 20.1 percent net IRR and a 1.5x multiple as of September 30, according to NJDOI. The firm’s latest publicly disclosed transaction was the two-property portfolio purchase of warehouses in Grove City, Ohio. The firm bought the assets from Invesco Real Estate for about $12 million in February, according to RCA.

Neither Wheelock nor Exeter used a placement agent for their latest vehicles, according to NJDOI’s meeting materials.

The pension system allocated 5.2 percent of its $69.6 billion portfolio to real estate equity as of January 31. NJDOI’s real estate investments have returned 11 percent over the 12 months ending January 31, according to meeting materials.