TIAA-CREF launches $350m RE fund

The asset management arm of the US retirement specialist is targeting core real estate assets across the US with its new property fund.

TIAA-CREF Asset Management has launched TIAA-CREF US Real Estate Fund I, a closed-end fund that will invest primarily in core real estate in the office, retail, industrial and multifamily sectors across the US. The vehicle has a target capital raise of $300 million (€190 million) with TIAA-CREF making a $50 million investment in the fund. US Real Estate Fund I – its first real estate fund for private investors – will target mainly high net worth investors represented by registered investment advisors.

“At least 80 percent of our investments are expected to be in high-quality core properties in the 50 largest US markets,” Suman Gera, managing director of TIAA-CREF Global Real Estate and portfolio manager for the fund said in a statement. The vehicle will look at properties 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 properties.

It is expecting to have a first close of $150 million on the vehicle, with a second close on $300 million. The fund will have a term of seven to ten years.

As at end of 2007, TIAA-CREF Global Real Estate directly owned more than $25 billion of properties in the office, retail, industrial and multifamily sectors across the US, Canada and Western Europe.