TIAA-CREF Launches New Real Estate Fund
TIAA-CREF Asset Management today announced the launch of TIAA-CREF U.S. Real Estate Fund I, L.P, a closed-end fund that will invest in a diversified portfolio of primarily high-quality core real estate assets in the office, retail, industrial and multifamily sectors.
The U.S. Real Estate Fund I offers primarily high net worth investors represented by registered investment advisors access to the institutional real estate experience of TIAA-CREF, and the company’s sixty years of experience with that asset class.
“The Fund will aim to provide investors with a total return experience through an actively managed portfolio of primarily office, retail, industrial and multifamily properties in a wide variety of markets across the United States,” according to Philip McAndrews, managing director and head of portfolio management for TIAA-CREF Global Real Estate. “The seven to 10 year term of the fund provides the portfolio management team latitude to seek maximum capital appreciation over the long term.”
The offering of the Fund’s limited partnership interests has been registered with the SEC and state securities administrators.
“We look forward to working with financial advisors offering suitable investors, with a long-term investment horizon, the opportunity to invest in direct ownership of real estate properties through TIAA-CREF,” said Shawn Paulk, head of TIAA-CREF Asset Management’s Advisor Services group. “This opportunity was formerly only available to institutions and eligible TIAA-CREF plan participants.” TIAA-CREF U.S. Real Estate Fund I, L.P. is directed at investors with a net worth (as defined in the prospectus) of at least $3 million, who wish to diversify their personal portfolio and participate in the direct ownership of real estate properties.
The Fund has an initial minimum investment requirement of $150,000. A subsidiary that will elect to be taxed as a real estate investment trust (REIT) is expected to make substantially all real estate asset transactions. The term of the fund is seven years after the end of the offering period, which the general partner may extend to a maximum of 10 years. For this reason, participation is suitable only for investors with a long-term outlook.
“At least 80% of our investments are expected to be in high-quality core properties in the 50 largest U.S. markets,” said Suman Gera, managing director of TIAA-CREF Global Real Estate and the portfolio manager for the Fund. Ms. Gera continued, “We intend to use a top-down and bottom-up research approach to select commercial properties, primarily in the office, retail, industrial and multifamily sectors, which are expected to provide a stable, predictable income stream, have high occupancy levels, credit-worthy, financially sound and reputable tenants, and a low or modest level of projected near-term tenant turnover.”
The remainder of the Fund’s assets will be invested in value-add assets, which include properties that feature generally higher vacancy rates, present more varied leasing opportunities and near-term lease expiration exposure and may require capital infusions to enhance the leasing profile of such properties.
With very limited exceptions, each investor wishing to purchase units must be represented by a registered investment advisor or a chartered trust company. TIAA-CREF charges no performance fee or sales charge at the Fund level.
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