Massachusetts PRIM makes follow-on commitment

The $54 billion Massachusetts Pension Reserves Investment Management Board has approved a commitment of up to $100 million to DivcoWest Fund IV, a value-added fund managed by DivcoWest, at its Dec. 3 meeting.

DivcoWest’s fourth fund launched this year with an $888 million fundraising goal. The fund is expected to replicate its predecessor’s investment style, targeting office and industrial properties in technology-oriented growth markets.

This is a follow-on investment to the fund series by PRIM. The pension fund committed capital to Fund IV’s predecessor, DivcoWest Fund III. DivcoWest Fund III closed in January 2012, exceeding its $800 million target with $871 million raised in equity commitments. With leverage, DivcoWest Fund III provides the firm with more than $2 billion of capital available for investment. The firm currently is investing Fund III’s capital. Recently, PRIM and Fund III acquired the 543,000-square-foot 333 Bush St. in San Francisco, valuing the property at $275 million.

In August, the PRIM board approved a doubling of its noncore target from 5 percent to 10 percent of its property portfolio, with the option to increase the allocation to 15 percent. The 10 percent allocation provided the historically core real estate investor with an additional $250 million of capital to invest in noncore.