Inland Teams With Dutch Pension Fund on $600M JV

IAGM Retail Fund I Member, a wholly owned subsidiary of Inland American Real Estate Trust Inc., has formed a new retail joint venture with PGGM Private Real Estate Fund, a $172 billion Dutch pension fund service provider.

IAGM Retail Fund I Member, L.L.C., a wholly owned subsidiary of Inland American Real Estate Trust Inc., has formed a new retail joint venture with PGGM Private Real Estate Fund, a €133 billion ($172 billion) Dutch pension fund service provider.

“The deal with Inland fits perfectly in the strategy PGGM is pursuing in the U.S., investing in income generating defense assets in selective regions,” Guido Verhoef PGGM’s head of private real estate, told Commercial Property Executive. “PGGM prefers to build and maintain long term relationships with best in class local real estate operators in which both parties are fully aligned. The deal with Inland is a follow-up deal that has not so much to do with timing but more with a continuation of the relationship based on a good portfolio of retail assets.”

The $600 million joint venture will focus on stabilized necessity-based, multi-tenant retail shopping centers in Texas and Oklahoma in its investment plan. Inland American will take on a majority equity stake of 55 percent and as the managing member and retain property management rights.

“We are delighted to establish this partnership with PGGM, one of the world’s largest and most respected pension fund administrators and asset managers,” Michael Podboy, Inland American Business Manager & Advisor, Inc.’ senior vice president of non-core asset management, said in a company statement. “This partnership is a strategic fit with Inland American’s long-term business and investment strategies and provides a strong platform for future growth in our core retail sector, while maximizing the benefits to our stockholders.”

The partnership had PGGM contributing nearly $79.4 million of equity and Inland American bringing in a portfolio of 13 stabilized necessity-based retail assets, totaling approximately 2.3 million square feet. The properties, located in Houston, Dallas, San Antonio and Oklahoma City, have anchor tenants such as H-E-B, Kroger and Target. PGGM will also contribute $50.7 million for new acquisitions in the targeted markets.

According to Steven Zeeman, senior investment manager of PGGM Private Real Estate, the deal fits the company’s investment criteria, which is to provide its clients with responsible, stable investments. Cap rates are expected to range from 6.5 percent to 8 percent, with most of the acquisitions expected to fall in the $20 million to $60 million range.

Jones Lang LaSalle assisted PGGM for property due diligence on contributed Inland American properties. Inland Institutional Capital Partners Corporation assisted Inland American with the transaction.