Improved a Pension Fund’s CRE Portfolio Performance through Valuation, Appraisal Review, Consulting & More

In 2009, amid a swiftly shifting real estate landscape, a leading U.S. pension fund decided it needed an independent valuation and consulting firm to provide checks and balances and verify whether the valuations reported to the fund were reasonable compared to similar assets in the same markets. The fund owned office, industrial, retail, apartment and other properties, including both separate accounts and joint venture assets. In addition, the fund sought a technology and process solution that would provide both a 30,000-foot view of its portfolio and the granular detail to make meaningful asset-level decisions. Ultimately, the fund wanted to achieve greater transparency to drive value and improve reporting to its investors.

The pension fund partnered with SitusAMC, which onboarded an initial 88 separate assets valued at $4.1 billion. To better support decision making and reporting, SitusAMC recommended the fund increase the frequency of its external appraisals, from once every three years to an annual process. This provided a better handle on both the assets and their markets, and ensured timely identification of issues that could impact values. Due to the success of the partnership, the client expanded the relationship to include more than 445 assets valued at approximately $40.5B across a global geography, with SitusAMC providing quarterly reports to the fund on the real estate portfolio performance. Additionally, SitusAMC onboarded its proprietary Valuation Management System (VMS), a system to help centralize the data, documents and processes core to the valuations. 

The partnership has proven mutually beneficial. SitusAMC’s approach has helped the pension fund enhance the management and reporting of its portfolio’s values and has enabled more informed decision making. The client continues to extend its relationship with SitusAMC, most recently adding independent fiduciary services, reviewing buyouts of assets from joint ventures that the fund wants to retain in its portfolio.