Preqin’s Real Estate Online currently tracks 440 Western US-based institutional investors currently investing in real estate. These investors are responsible for $1.3tn worth of assets alone, with the top 25 Western US-based investors by allocation to real estate representing $120bn. Western US-based investors have an average current allocation of 10.4% of total assets to real estate, just above the average target allocation of 10%, which indicates that there is a small amount of capital to be deployed going forward.
Of the top 25 Western US-based real estate investors, 72% are public pension funds, with the remainder split between private sector pension funds (8%), endowment plans (8%), sovereign wealth funds (4%), multi-family offices (4%) and insurance companies (4%). Regarding their preferred route to market, all of the top 25 investors invest directly and via private real estate vehicles. Additionally, 76% of these investors are utilizing co-investment, joint venture or separate account opportunities.
Twenty-four percent of the top 25 Western US-based investors are planning on committing capital to private real estate over the next 12 months. These investors will all target core and/or value added strategies across North America, Europe and Asia.
In Q3 2014, Oregon State Treasury (OST) planned to commit $1.1bn to private real estate funds over the following 12 months. It has since committed $900mn through various private real estate vehicles and two separate account structures, utilizing existing managers in its portfolio as well as forming new GP relationships. The public pension fund will continue to target US-focused funds employing value added strategies.