Recent Real Estate Sales Generate Excellent Returns for the Pension System
The Dallas Police and Fire Pension System recently sold two major investment properties, indicating that the real estate market is enjoying a strong recovery after the lingering effects of the recession. Real estate is being helped by the current surge in the public equity markets. Last year was a good year for the System, and it looks like 2013 is shaping up to be an even better year.
The Pension System sold Riata Town Center and Apartment Villages, a 2,000 unit community located on 160 acres in the Arboretum area of Austin, TX. The 11-year old project has been completely remodeled. Closing late last year, Riata was the largest 2012 real estate deal in Austin. The System owned a 49% share in Riata, which sold for $236.6 million, netting the Pension System $14.6 million or an outstanding 25.25% return on our investment.
The Pension System recently sold its remaining Trade Center portfolio of distribution warehouses, located near DFW Airport, earning the System $25.3 million for a net return of 7.8% on its investment. The three single-story buildings, Trade Center I, II and IV, contain nearly 1,500,000 sq. ft. of rentable space. Two additional buildings in the Trade Center portfolio were sold in 2011 for a return on investment of 12.7%.
These sales indicate a more confident business environment. They also help us to rebalance our asset allocation as part of a plan to further diversify our investments and protect us from volatility in the global marketplace.
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