Key Takeaways
- • Arkansas Teacher Retirement System approved a $100m (€85.2m) commitment to Realty Income's open-ended US core-plus real estate fund, according to a board meeting document.
- • The Realty Income US Core Plus Fund currently holds 183 industrial and retail properties across 33 states, valued at approximately $1.4bn.
- • The fund recently held an initial closing of $715m, with around half earmarked to buy into the seed portfolio and the remainder for future acquisitions.
- • The fund targets a net internal rate of return of 9% to 11% using leverage of 35% to 50%, and Realty Income plans a long-term $500m co-investment.
- • Arkansas Teacher also committed $50m to Raith Real Estate Fund IV, which is seeking $900m, and $75m to ISQ Global Infrastructure Fund IV, which is seeking $15bn.
Summary
Arkansas Teacher Retirement System has approved a $100m (€85.2m) commitment to the Realty Income US Core Plus Fund, an open-ended US core-plus real estate vehicle seeking to acquire and manage a portfolio of diversified net lease investments. The commitment was disclosed in a board meeting document, as reported by IPE Real Assets.
The fund currently holds 183 industrial and retail properties across 33 states, valued at approximately $1.4bn. According to people familiar with the fund, Realty Income recently completed an initial closing of $715m, with capital sourced from pension funds, asset managers, investment advisors and sources managed by The Townsend Group. Roughly half of the initial capital is expected to fund the seed portfolio, with the balance reserved for future acquisitions. The fund targets a net internal rate of return of 9% to 11%, using leverage of 35% to 50%. Realty Income plans to issue a long-term $500m co-investment alongside the fund. Realty Income did not respond to a request for comment.
In the same board disclosure, Arkansas Teacher approved a $50m commitment to Raith Real Estate Fund IV, a value-add vehicle managed by Raith Capital Partners that is seeking to raise $900m. The fund plans to acquire or develop a mix of industrial, apartment, office, hotel and niche property types. Arkansas Teacher also issued a $75m commitment to ISQ Global Infrastructure Fund IV. I Squared Capital is seeking to raise $15bn for that fund, which aims to build a diversified portfolio of 25 to 30 investments in middle-market and larger opportunistic assets.
The fund currently holds 183 industrial and retail properties across 33 states, valued at approximately $1.4bn. According to people familiar with the fund, Realty Income recently completed an initial closing of $715m, with capital sourced from pension funds, asset managers, investment advisors and sources managed by The Townsend Group. Roughly half of the initial capital is expected to fund the seed portfolio, with the balance reserved for future acquisitions. The fund targets a net internal rate of return of 9% to 11%, using leverage of 35% to 50%. Realty Income plans to issue a long-term $500m co-investment alongside the fund. Realty Income did not respond to a request for comment.
In the same board disclosure, Arkansas Teacher approved a $50m commitment to Raith Real Estate Fund IV, a value-add vehicle managed by Raith Capital Partners that is seeking to raise $900m. The fund plans to acquire or develop a mix of industrial, apartment, office, hotel and niche property types. Arkansas Teacher also issued a $75m commitment to ISQ Global Infrastructure Fund IV. I Squared Capital is seeking to raise $15bn for that fund, which aims to build a diversified portfolio of 25 to 30 investments in middle-market and larger opportunistic assets.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.