TIAA-CREF has long been considered an institutional investor in the private equity real estate space. However, according to an interview with the New York-based retirement fund's head of global real estate, it has steadily been becoming more active as a real estate investment manager and should probably be seen as such.
In an interview conducted today at the PERE Forum: New York by Crosswater Realty Advisors' founding president Ted Leary, TIAA-CREF's Thomas Garbutt said the retirement fund has been expanding its footprint as an investment manager. When Leary asked Garbutt if TIAA-CREF was a GP, LP or all of the above, Garbutt replied: “We're all of those. We were looking at our business about [five] years ago, and it made sense to expand our platform and manage money for others as well.”
Just listed in PERE's Global Investor 30, our ranking of the largest institutional real estate investors in the world, TIAA-CREF has morphed into a manager in earnest over the past two years and is looking to expand that part of its business even more in the future. “It would make sense to now characterise our business as a real estate investment manager,” said Garbutt.
In terms of the retirement fund's overall real estate investment strategy, Garbutt said the name of the game for TIAA-CREF is to “maintain discipline in frothy times”. Specifically, in terms of asset classes, it is attracted to the top regional malls, multifamily and office in “supply-constrained markets”. As of 31 December 2010, TIAA-CREF Global Real Estate directly owned more than $14 billion of office, retail, industrial and multifamily properties on behalf of individuals and public and private institutions.
Indeed, TIAA-CREF has been very active in those spaces recently. In October, it was announced that TIAA-CREF formed a joint venture with Netherlands-based APG for a portfolio of five US regional malls valued at $1.53 billion. Previously, the retirement fund announced in September that it had purchased 33 Arch Street, a 600,000-square-foot office tower in Boston for $365.8 million.
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