PGIM Halfway to $750 Million Target with Newest Senior Housing Fund

PGIM Real Estate is raising funds for its latest senior housing at a rapid pace.

The Parsippany, New Jersey-based real estate investment firm is more than halfway toward its $750 million fundraising target, with significant contributions from pension funds paving the way.

The Pennsylvania State Employees Retirement System (SERS) approved a $100 million commitment to PGIM’s Senior Housing Partnership Fund VI last March. That was followed by a to-be-determined commitment by the Hawaii Employees’ Retirement System. The system previously committed $25 million to PGIM’s fifth senior housing fund in 2014.

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Last week, the Ohio Bureau of Workers Compensation approved a $75 million commitment to the fund, IPE Real Assets reported. To date, PGIM has raised $356 million in commitments, and will co-invest an additional $25 million. It reported $256 million in commitments at the end of Q1 2019, according to SEC documents.

PGIM’s most recent senior housing fund closed with $629 million in commitments in 2015.

The fund will target private pay independent living and assisted living facilities, using 65% of leverage, and targeting net returns between 9% and 13%.

PGIM declined a request for further comment to Senior Housing News.

A growing number of investment funds are targeting senior living, as the industry matures into a core real estate asset class.
Last September, Locust Point Capital announced its debut senior housing fund closed oversubscribed with $312 million in commitments.

Kayne Anderson Real Estate Advisors (KAREA) and Bridge Investment Group each raised senior housing funds in excess of $1 billion. Earlier this year, Bridge used money from its fund to acquire the assets and operations of Somerby Senior Living, giving it a national operating platform.

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