As part of its plan to commit a total of $150 million to non-core real estate funds over the current year, the Ohio Bureau of Workers' Compensation (BWC) has made another contribution to a value-added real estate vehicle.
According to documents from the $21 billion state workers compensation fund, Ohio BWC approved the recommendation of its consultant, RV Kuhns & Associates, to commit $50 million to Latitude Management Real Estate Capital (LMREC) III at its February board meeting. The investment strategy of Los Angeles-based Latitude Management’s latest fund is to originate short-term, floating-rate first mortgages and bridge loans on transitional value-added commercial property.
Latitude's niche is defined by its focus on smaller sized assets— typically between $5 million and $25 million—located in primary and secondary markets in the West, Southwest and Southeast. The property types are limited to multifamily, office, industrial, hospitality and grocery-anchored retail. LMREC III is expected to raise about $550 million in equity, and a third closing is expected in March.
Previously known as Legg Mason Real Estate Investors, Latitude changed its name in April 2009 when Legg Mason exited the business. It was reported in December that the Pennsylvania Public School Employees’ Retirement System resolved to commit $75 million to LMREC III.
Ohio BWC’s investment in LMREC III is the compensation fund’s second value-added investment. In January, it committed $50 million to KTR Industrial Fund III, a value-added industrial fund targeting $750 million in equity commitments, with a hard cap of $1 billion. Ohio BWC plans to make seven additional non-core investments of $50 million each over the next three years, including one more this year, to reach its real estate allocation of 6 percent.