By Jon Peterson
The J.P. Morgan Strategic Property Fund has made a $75.9 million net fund equity investment into the Stack House mixed-use property in the South Lake Union submarket in Seattle, according to sources familiar with the investment fund.
The Strategic Property Fund is managed by New York City-based J.P. Morgan Asset Management. The real estate investment management firm declined to comment when contacted for this story.
The seller of the property was Seattle-based Vulcan Real Estate. The asset is located at the northwest corner of Yale Avenue North and Harrison Street. One part of the property is a 278-unit apartment complex. There is an office component that is leased to Amazon.com, and the third part of the property is the Rigoletto restaurant and Metropolitan Café and Deli.
The Strategic Property Fund is one of the largest core open-ended commingled funds in the United States. It was formed in 1998, and it has a portfolio of total net assets valued at $25.6 billion, through March of this year, according to a pension fund document from the Orange County Employees Retirement System.
The commingled fund has its largest concentration of assets located in the West Coast. This region makes up 39.6 percent of the fund’s total portfolio. The rest of the assets are split in the East, South and Midwest regions of the country.
The Strategic Property Fund is most heavily weighted to office buildings. This property type accounts for almost 46 percent of the commingled fund’s portfolio. The balance of the portfolio owns retail, apartments and industrial assets.
The commingled fund has an entry queue of $1.8 billion. This is capital that has been committed to the fund from investors but has not been called by the manager—it’s likely that it will take at least three or four quarters before that occurs. These new commitments would be used for additional investments made by the fund or if an existing investor decides to withdraw its capital from the fund.
Orange County Employees made a $100 million commitment into the Strategic Property Fund in June of last year. It has placed a market value on this investment of $110.3 million. The commingled fund has a current loan-to-value ratio of 28.05 percent. There are a total of 170 completed investments in the fund and 372 investors in the fund.
