TIAA-CREF, Henderson to Birth New Euro-Asia Entity

In a transaction worth $176 million, TIAA-CREF, New York, and Henderson Global Investors, London, will create TIAA Henderson Global Real Estate, a new investment management company.

Thomas Garbutt,  head of TIAA-CREF Global RE

In a transaction worth $176.4 million, TIAA-CREF, New York, and Henderson Global Investors, London, will create TIAA Henderson Global Real Estate, a new investment management company, the two parties announced Monday.

Under the deal, which is expected to close in the first quarter of next year, TIAA Henderson will consist of TIAA-CREF’s European real estate business, Henderson’s European and Asia/Pacific-based real estate businesses, and “a new global distribution and client service organization.” TIAA Henderson will be owned 60 percent by TIAA-CREF and 40 percent by Henderson Global Investors.

In a related transaction, TIAA-CREF is acquiring Henderson’s U.S. real estate business, which includes a staff  of 27 at offices in Chicago and Hartford, Conn., and focuses primarily on U.S. core and value-add investments across the major property types, with a specialty in multi-family housing. The U.S. team currently has $2.5 billion in assets under management, comprising 100 multi-family housing, student housing, office, retail and industrial properties across the country, a Henderson spokesperson told Commercial Property Executive. 

TIAA CREF paid £114.2 million for their 60 percent of the joint venture and for Henderson’s North American property business, according to the spokesperson.

The joint venture will be headquartered in London, with offices in Europe, Asia/Pacific and North America, and will be overseen by a joint board of directors. Thomas Garbutt, head of TIAA-CREF global real estate, will become chairman of TIAA Henderson, and James Darkins, managing director/property at Henderson, will be the CEO.

The JV has a total of $19.8 billion in CRE AUM, the spokesperson told CPE.

TIAA-CREF will continue to manage its own North American CRE business and in addition will provide investment management services for the JV.

TIAA Henderson will have exclusive rights to offer direct property and property debt investments outside of North America for both companies. In addition, it will launch a new business initiative in CRE debt, including co-investment from TIAA-CREF.

“We believe there are compelling growth opportunities in global real estate,” Garbutt said in a statement. “This new venture will leverage TIAA-CREF’s financial strength and long-standing real estate investment capabilities together with Henderson’s expertise and wide array of real estate investments in Europe and Asia Pacific.”

“Henderson has long recognized that its property business would benefit from greater scale and access to capital to accelerate its future growth,” Andrew Formica, chief executive, Henderson Group plc, said in the same release. “We are delighted to have a financially strong and stable partner in TIAA-CREF.”