US Open-Ended Real Estate Funds “Limit” Distributions, Redemptions, Investors Say | New


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US open-ended real estate funds managed by Heitman and ASB Real Estate Investments have been ‘locked in’ and other vehicles in the $ 264 billion (238 billion euros) NCREIF ODCE index are expected to follow suit, according to the reports. investors.

The Ohio Bureau of Workers Compensation told IPE Real Assets that it knows the Heitman America Real Estate Trust “will not pay any redemption requests for the qualifying quarter.”

Anthony Breault, senior real estate investment manager for the Oregon State Treasury, also said the ASB Allegiance Fund had “suspended dividend distributions in order to manage cash flow and redemptions during this period of time. ‘illiquidity’.

Heitman declined a request for comment and ASB did not respond to a request for comment.

The blocking of ODCE funds should be more generalized. Paul Chapman, director of real estate and real return strategies for the New Mexico State Investment Council (New Mexico SIC), said: “In our portfolio, most of the core open-ended funds have blocked redemptions.

New Mexico SIC is invested in PRISA, UBS Trumbull Property Fund, Heitman America Real Estate Trust, Jamestown Premier Property Fund and Lion Industrial Trust.

Chapman told IPE Real Assets that “the exception appears to be industry-focused funds where values ​​hold up well as redemptions and contributions are small relative to the size of the fund.”

Breault told IPE Real Assets that: “We have anticipated that most, if not all, open-ended funds will adopt lock-in measures for redemptions and dividends in order to best protect net asset value for investors and to ensure adequate cash flow hedge. for debt service.

A survey released Monday by the Pension Real Estate Association (PREA) found that 67% of U.S. investors expect current valuation assessments of real estate assets to “contain significant uncertainties,” and 23.9% expect that ‘they will be “a less precise estimate of actual value at present than under normal circumstances”.

Only 5.5% believed that ratings would, on average, be as accurate as under normal circumstances, and 3.7% had no opinion.

To read the digital edition of the latest IPE Real Assets magazine, click here.

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