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TA Realty Pulls in $2 Billion for a New Core Property Fund

Will Target a Diversified Portfolio Across Major U.S. Markets
April 12, 2018
TA Realty's most recent deal was the $106.5 million purchase of Gables Woodley Park in Washington DC.

TA Realty, among the largest real estate investment managers in the U.S., is set to get larger - much larger. The Boston-based firm has launched a new core property investment with initial funding of $2.08 billion.

The main fund, TA Realty Core Property Fund, and three affiliated feeder funds held their first capital calls late last month.

One of the affiliated feeder funds accepted a single investment from an unidentified outside investor of $1.038 billion, according to a filing with the Securities and Exchange Commission. A second affiliated fund accepted a single investment of $518.8 million.

The primary fund will continue to accept new investments after its initial raise of $512.8 million. Also a fourth affiliated fund will continue to accept investments after its initial raise of $13.2 million.

Officials with TA Realty said they could not comment because of the ongoing nature of fundraising.

Mitsubishi Jisho Investment Advisors of Tokyo is handling the ongoing securities offerings.

TA Realty has been on the road this year making presentations on the fund to various public pension funds, including the City of Newport RI, and the Plymouth County (MA) Retirement Board, which committed $25 million to the fund.

TA Realty is seeking to build a diversified portfolio of core properties across the U.S. Over the past three years, TA has invested about $3.3 billion in all four major property types, according to CoStar data. About 36% of the spending has been for industrial properties, 34% office, 24% multifamily, and 6% retail.

Not counting TA Realty's $2 billion raise, alternative assets data provider Preqin reported that 47 private real estate funds held a final close in the first quarter, raising a total of $33 billion in investor commitments.

Preqin said it expected those figures to rise up to 10% as more information became available. A 10% increase could be enough for the quarter tally to surpass the previous record set in in the first quarter of 2008 when 79 funds secured $35 billion.

Looking ahead, competition for capital shows no signs of abating with a record 642 funds in market, targeting $206 billion.

"What is also striking about activity in Q1 is the proportions of funds which have been able to raise more capital than their initial target, in some cases by a significant margin," said Oliver Senchal, head of real estate products for Preqin. "However, with the sheer number of funds seeking capital there will be many that will fail to close in the year ahead, particularly when commitments are being directed to a smaller proportion of managers with the longest and strongest track records."

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