USAA Real Estate provides co-investment, acquisition, build-to-suit and development services for corporate and institutional investors and arranges commercial mortgage loans on behalf of affiliates. The portfolio consists of office, industrial/logistics, multifamily, retail and hotel properties. USAA Real Estate is a subsidiary of USAA, a leading financial services company, serving military families since 1922. For more information, visit www.usrealco.com.

Sector forecasts

INDUSTRIAL: We are focused on acquisition opportunities in the US with current vacancy or near-term lease rollovers that provide us with an attractive cost basis, as compared to replacement cost. For build-to-suit development, we are targeting investments with the following distinct characteristics:

  • Assets with locational and physical attributes that make them highly functional and state of the art.
  • Strong tenant credit, primary lease terms of 10+ years and annual contractual rental increases 
  • Appropriate investment basis, as compared to conventional warehouse/ distribution/logistics properties

We are also willing to pursue speculative development in smaller industrial/ logistics buildings (150,000–400,000 sq ft) that we believe offer strong investment potential and have largely been immune from the competitive nature of the build-to-suit market.

OFFICE: We will consider best-in-class development opportunities, in the strongest office markets, with target deliveries in 2022 and beyond. Demand for new, innovative, and efficient buildings has increased. Notably in the technology, medical, media and finance sectors. In addition, our government-leased office offers an attractive opportunity at this point in the cycle, given its stable cash flows and typically limited ongoing capital requirements. On a selective basis, we also target office acquisitions that offer genuine opportunities to create value. 

RESIDENTIAL: Our emphasis continues to be on core creation by acquiring assets below replacement cost that offer the chance to add value through renovation and enhanced property management. This strategy includes individual properties as well as portfolio acquisitions, particularly for urban infill locations in transit-oriented, mixed-used nodes outside the central downtown core. From a development perspective, we will also continue to pursue our build-to-core strategy, targeting submarkets with substantial population and employment growth.

Investment principles & strategy

A deeply embedded culture of service, alignment and transparency is now shared with over 100 like-minded foreign and domestic investment partners. As a significant co-investor in all programs, USAA Real Estate maintains an ‘Investor First’ mindset.

A specialised approach is taken for each property sector, without losing sight of our

Guiding Investment Principles:

  • Acquire only high-quality assets with strong elements of design, size, and access – such that the asset will outperform the greater marketplace over time
  • Acquire assets in the best locations
  • Acquire assets with broad appeal to future institutional investors
  • Maintain discipline concerning replacement cost Value investing is executed with a disciplined and repeatable process, creating superior risk adjusted returns across a range of different property types and risk profiles.

Value-Oriented Investment Programs:

  • Providing a full range of equity and debt strategies with both USAA Real Estate and Square Mile initiatives
  • Ability to take quick action in response to market opportunities and conditions
  • Flexible ownership structures to optimise tax efficiency
  • Multiple exit strategies to enhance investor yields
  • Research-based portfolio construction process

More information available at www.usrealco.com