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Investors - MAY 4, 2018

Tennessee Consolidated commits $150m to real estate

by Jody Barhanovich

The $49 billion Tennessee Consolidated Retirement System has committed $50 million each to three real estate funds, according to JP Rachmaninoff, director of real estate for the pension fund.

The three funds include GreenOak U.S. Fund III, Savanna Real Estate Fund IV and CBRE Strategic Partners U.S. Value 8.

GreenOak U.S. Fund III is managed by GreenOak Real Estate, a real estate investment management and advisory firm. The value-added fund will target major coastal gateway cities in the United States and is seeking to raise $750 million to $1 billion to invest in office, retail, multifamily and logistics properties.

The second fund, Savanna Real Estate Fund IV, is managed by Savanna Partners. Fund IV will be focused exclusively on investments in the five boroughs of New York City and will be a continuation of the firm’s strategy to acquire underperforming, older properties and add value through strategic capital improvements and leasing efforts. The fund held a $591 million final close in 2017.

The third fund, CBRE Strategic Partners U.S. Value 8, is managed by CBRE Global Investors. The fund typically invests its capital in the top dozen U.S. metropolitan markets where it can generate income by implementing its proprietary operating programs and tenant service standards. The fund held a $1.34 billion final close in 2017.

Tennessee Consolidated Retirement System has a target allocation to real estate of 10 percent and had an actual allocation of 7.6 percent, as of Dec. 31, 2017.

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