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Canadian Heavyweight Investor Taps Tishman Speyer As Partner For Foray Into U.S. CRE

The Investment Management Corporation of Ontario and Tishman Speyer have inked an agreement to acquire and develop U.S. commercial properties, including office and multifamily assets. The initial commitment totals $500M, with an option for an additional $250M.


"This partnership allows us to access larger transactions where few bidders can compete," IMCO Chief Investment Officer Jean Michel said in a statement.

According to Tishman Speyer, the venture will facilitate the expansion of its presence in major U.S. markets by allowing it to take advantage of value-add opportunities.

The partners didn't specify any particular properties, but did say that they will target major supply-constrained U.S. markets, including New York, Washington, D.C., Boston, Los Angeles, San Francisco, Chicago and Seattle.

The government of Ontario created IMCO in 2017 as an independent entity to pool funds from various public sector pension plans in the province. It is similar to other such provincial-scale investors, such as the Alberta Investment Management Corp., though participation isn't mandatory.

The thinking is that such an arrangement can offer smaller funds lower costs through economies of scale, the Financial Post reports. Currently IMCO has $63.3B of assets under management.

IMCO isn't alone in wanting to be in the U.S. According to AFIRE's most recent survey of foreign investor sentiment, which was released in April, investors remain confident in a strong U.S. economy, good real estate market fundamentals and uninterrupted capital inflows to U.S. real estate. 

AFIRE, A Fellowship for International Real Estate, is a trade organization for non-U.S. institutional investors active in the United States.

Industrial and multifamily were the property types in which respondents would most like to increase their exposure. The AFIRE survey found that nearly 80% of respondents want to increase industrial exposure and 71% want to increase multifamily exposure.

With investors overwhelmingly indicating confidence in strong economic conditions in the U.S., fully 14% expect 2019 to present more attractive investing opportunities in U.S. real estate than in 2018, including among emerging niche markets and property types, according to AFIRE.