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 remodelled. 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 USD236.6 million, netting the Pension System USD14.6 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 USD25.3 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.