Principal Real Estate Investors

2018 Top 100 Real Estate ranking: 9http://www.principalrealestateinvestors.com

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Manager Details

Principal

Principal Real Estate Investors is the dedicated real estate investment group within Principal Global Investors, a global investment management leader, tracing our history back over more than six decades of real estate investment experience.

Over that time we’ve built a top-tier investment platform that provides comprehensive, specialised capabilities across all four quadrants of commercial real estate – public and private equity, public and private debt. This platform gives us a unique perspective on real estate space and capital markets, allowing us to deliver solutions that meet our clients’ investment goals, including sustainability and risk management guidelines.

Our four quadrant investment platform includes:

• Private market equity including core, value-add and opportunistic separate accounts and commingled funds.

• Core mortgage origination and loan servicing including whole loan, mezzanine and high-yield debt strategies.

• Public market strategies including US CMBS and global & regional global property securities, both of which are available through our UCITS fund platform.

In April 2018, Principal added significant European real estate expertise with the acquisition of Internos, a pan-European investment manager. Now rebranded Principal Real Estate Europe and headquartered in London, it manages €2.8bn across all property sectors in a range of core, opportunistic and thematic real estate strategies.

Investment principles & strategy

We provide the reach, research, and returns you need to meet your investment goals.

Reach – to give our clients access
Our preferred access to commercial real estate opportunities results from several factors:

  • The scope and scale of our operations. We completed more than $14.1bn in private equity, private debt, and project financings in 2018,1 generating valuable insights and knowledge for our clients.
  • The depth of our industry and client relationships. We cover approximately 45 US metropolitan markets and we manage over 150 assets across nine European countries.2 And we serve more than 475 institutional clients from 25 countries3 and rank among the top 10 managers of real estate assets worldwide.
  • The size and global diversity of our investment team. We can access a wide range of high-quality market opportunities with our experienced team of more than 275 real estate investment professionals around the globe.

Research – to assess relative value
We believe research is key to delivering on our clients’ investment outcomes. It’s also our fundamental factor in evaluating the relative value of each investment opportunity. We base our investment decisions on a combination of bottom-up asset analysis and top-down economic and sector analyses.

Returns – to help meet desired outcomes in innovative ways
We strive to deliver consistent, risk-appropriate performance and strong relative value. In a constantly evolving marketplace, innovation is critical to that mission, whether it’s sustainable investing or ‘next-generation’ investment strategies.

Four quadrants and a 360° view of commercial real estate
There are four distinct ‘quadrants’ of commercial real estate investing: public equity, private equity, public debt, and private debt. We provide focused expertise through dedicated teams in each quadrant. And we enhance that focus through the insights and potential added value of cross-team collaboration.

Broad market access
Our diverse investment teams, located in the US, Europe, Asia and Australia have deep relationships within the industry, giving us preferred access to commercial real estate investment opportunities. This broad access also contributes to our research, allowing us to continuously incorporate real-time data and information into our underwriting and investment decisions.

Private equity
We provide expertise in all areas of the private equity real estate market, including acquisitions, dispositions, asset management, and development. We source and close a significant number of high-quality investments to meet the targeted outcomes of our investors.

Leasing is a key strength for our US platform. We have executed more than 25,000 leases across 430m sq ft since 2001 (as of 30 June 2019). In Europe, our private equity capabilities stretch across traditional sectors like office, retail, and logistics, to specialised alternative sectors such as residential and health care.

Public equity
Since 1997, we have used our expert knowledge of the various commercial real estate security property sectors and regions to exploit market inefficiencies and generate alpha for our clients. We boast a very stable and proven portfolio management team that has historically generated outperformance across market cycles.

Our real estate securities team uses fundamental research to analyse and invest in securities issued by real estate-related companies. Combine that with the insights from our in-house private real estate professionals and equity analysts, and the result is a higher conviction in a company’s performance potential – an important ingredient to help clients achieve the outcomes they want.

Private debt
With more than 55 years of private debt investment experience and over 115 investment professionals, we’ve earned a reputation as a leader in the private debt market.

Over that time, we’ve found that delivering the best outcomes for private real estate debt investors means controlling the timing and quality of every aspect of a commercial mortgage transaction. We can do just that through our vertically integrated debt platform, which includes underwriting, closing, appraising, engineering, researching, and servicing.

As the complexity of real estate deals has increased, we’ve upgraded our skill set to specialise in intricate transactions (eg, B-notes, mezzanine loans, construction loans, and bridge loans). These enhancements allow us to offer our clients an even broader set of private debt opportunities from core and core plus, through value-add.

Public debt
Investors are drawn to commercial mortgage-backed securities (CMBS) for the potential yield enhancement, diversification benefits, and attractive risk-adjusted returns. And as one of the early investors in CMBS, our public debt team has modeled every US fixed-rate conduit deal since 1999. Today, we research more than 1,000 CMBS issuances every year – in both seasoned and new-issue pools.

We strive to achieve consistent outperformance and believe that superior security selection and disciplined monitoring are the keys to reaching that goal. Our proprietary dynamic CMBS-default model is another factor in our success, allowing granular loan-level analysis to inform a robust investment process.

Performance Verification
Principal Real Estate Investors claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Principal Real Estate Investors has been independently verified for the periods of 1 April 2000 through 31 December 2017. A copy of the verification report(s) is/are available upon request.

Research-based investing

Our investment process is team-oriented, multi-disciplined, and research based. Research is fundamental to our ability to assess relative value both within and across quadrants, and to deliver on our clients’ investment goals. The foundation for our investment decisions is a combination of top-down economic and sector analysis with bottom-up asset analysis, providing our investment professionals with the insights they need to successfully execute strategies.

Top-down analysis: Our deep macroeconomic and microeconomic research incorporates analysis of economic, demographic, political, technological, property, and capital market trends. We use current forecasts to develop a firm-wide consensus outlook for domestic and global economies and capital markets.

Bottom-up research: Data from our extensive equity and debt transaction, leasing, and asset management portfolio is combined with external and capital markets knowledge to develop forecasts for the metropolitan statistical areas that we cover. To determine relative value, we also use capital markets information including cap rate and pricing trends. This helps us evaluate whether current commercial real estate market trends are accurately priced.

Each quadrant’s team of investment professionals uses our top-down and bottom-up data to drive their investment decisions. Research insights are also shared across teams, as well as with our clients and the industry in general, through monthly, quarterly, and annual publications.

Consistent, risk-adjusted performance

Our goal is to deliver consistent, risk-adjusted performance and superior service. Our market reach and research are vital to achieving this goal - and so is our commitment to innovation, whether it be sustainable investing or the “next generation” investment strategy or solution.

Responsible property investing

Principal Real Estate Investors has a long-standing commitment to corporate stewardship and an established track record in responsible property investing. In 2010, we formalised this commitment by becoming a signatory to the Principles for Responsible Investment (PRI).

In 2013, we adapted and evolved the important philosophy of the PRI into our own Pillars of Responsible Property Investing initiative.

This initiative demonstrates our commitment to the PRI, and is a natural progression of our sustainable investment philosophy. As our clients’ fiduciaries, we view this framework, alongside other financial and non-financial investment criteria, as vital to delivering on our client’s long-term best interests.

In short, we believe that Responsible Property Investing is critical to superior asset management and fiduciary governance and helping to deliver positive financial and environmental outcomes. We welcome the opportunity to work with our clients and stakeholders to make this belief a reality.

Sector forecasts

Principal Real Estate Investors’ latest insights, including its semi-annual Inside Real Estate outlook which includes sector forecasts among other research, are available on its public website at www.principalrealestateinvestors.com or on our dedicated IPE Reference Hub profile.

COMPLIANCE STATEMENT | Principal Global Investors maintains an in-house compliance department covering all asset classes and Principal Real Estate Investors. The Chief Compliance Officer oversees the review of the business activities, fiduciary conduct and compliance with state and federal securities loans of our investment professionals, affiliated entities and business partners.

News from Principal Real Estate Investors

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News from IPE Real Assets

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White Papers / Research from Principal Real Estate Investors

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Analysis from IPE Real Assets

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     Multifamily developers and institutional investors continue to build more stock and new renters duly arrive. But, asks Christopher O’Dea, for how long? 

  • ESG data: Check your meter readings

    To put ESG theory into practice, real estate fund managers need good quality data. Some are taking it on themselves to get it, writes Christopher O’Dea

  • Investor Profiles: Australia

    The AUD2.2trn superannuation fund industry was an early proponent of real estate and infrastructure investment. Florence Chong profiles five of the biggest constituents

View more Analysis from IPE Real Assets

Head Office
801 Grand Avenue
Des Moines
Iowa
50392
United States
Contact
Stephen Holt Tel. +44 20 7710 0255

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