TIAA-CREF Asset Management manages a wide range of assets spanning a variety of portfolios. Learn more about how we implement our innovative investment strategies through these short case studies from around the globe.
WITH ADRIANA DE ALCANTARA, DIRECTOR OF TIAA-CREF UK ASSET MANAGEMENT
Through a global real estate portfolio spanning office, retail, industrial and multi-family properties, TIAA-CREF affects millions of people across the world in how they live, work and shop.
When acquiring assets, the TIAA-CREF Global Real Estate team seeks properties that are well located, and possess attractive existing or potential cash flows from high quality tenants. The team utilizes a combination of strategic research and applied expertise to identify these properties and construct the portfolio. The team applies active management and continued capital investment to the properties to generate long term capital growth.
TIAA-CREF has over 60 years of experience investing in shopping malls in the United States, and that expertise is drawn upon when developing and managing European assets. In addition, the organization understands the different dynamics driving asset performance across geographies and property markets, and adjusts its investing and management framework accordingly. TIAA-CREF understands the advantage local knowledge can bring. Partnering with local professionals who have lived and worked in the areas they are investing in, TIAA-CREF is able to gain access to unique opportunities and management insights.
“Retail, probably more so than any other asset class, is specific to the local market. Investors need to understand the needs of the consumers and historic shopping patterns if they want to be successful in the retail market.” explains Laura McGrath, Managing Director of European Investments
Recognizing the differences between U.S. and European malls is crucial to working to ensure the correct tenant mix, targeted marketing, and environmental initiatives for each location are achieved.
TIAA-CREF’s European Real Estate strategy is to partner with local professionals and actively manage the investments. This approach provides TIAA-CREF with the diversification benefits gained from investing in real estate outside of the U.S., while applying a similar active management style used closer to home.
Already a large investor in malls in the United States, TIAA-CREF is growing and diversifying its global real estate portfolio with investments such as German shopping center Erlangen Arcaden. The opportunity to develop the asset came in 2006, which gave TIAA-CREF the chance to engage with the local community early. A sensitive approach was required given the center would significantly alter the shopping environment for the one thousand year old town. Focused on ensuring the continued vibrancy of the town center as a whole, the development aimed to enhance, rather than detract from the existing shopping precinct. The attention paid off resulting in Erlangen Arcaden being embraced by the community and a commercial success with full occupancy at opening.
The design of the shopping center is sympathetic to the historic town center, and has in its own right become a draw-card for shoppers from the greater region. Curved walkways adjacent to existing pedestrian areas create the approach, and natural lighting within the center is maximized. This creates an appealing environment and reduces energy usage. A dedicated team at TIAA-CREF continues to focus on reducing the carbon footprint of the center including using alternative energy sources like solar power.
Location is everything in real estate. Erlangen Arcaden is central to trains, buses and major arterial roads, and within walking distance of the historic shopping area. This accessibility is one of the features supporting the property, along with its position in a desirable region, efficient design and lack of direct competition nearby.
The careful management of the community impact of such a large new development is part of TIAA-CREF’s strategy with this investment. In addition to being economically supported by the community it serves, the center has incentivized improvements in the local businesses as the benchmark for retail operators is raised. The positive impact from the development has spread to revitalize the rest of the downtown area in Erlangen.
Positioning for continued success in the long term, the tenant mix is continually refined to keep pace with a constantly changing marketplace, and the future customers of the center are already being addressed through new media marketing strategies targeting the next generation of shoppers.
The property described above is just one of many investments of TIAA’s General Account, an account solely owned by TIAA that is not available to individual investors and whose performance is not directly allocated to any specific contract or obligation. TIAA’s General Account invests in a broad range of diversified investments to support TIAA’s contractual guarantees and business operations.
Past performance is not indicative of future results. The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
© 2012 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund, New York, NY 10017
Past performance is not indicative of future results. The information on this website should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
TIAA-CREF Asset Management provides investment advice and portfolio management services for the TIAA-CREF group of companies through our investment advisers including Teachers Advisors, Inc., a registered investment adviser and wholly-owned indirect subsidiary of Teachers Insurance and Annuity Association (TIAA). TIAA® personnel in its investment management area provide investment advice and portfolio management services through the following entities: Teachers Advisors, Inc., TIAA-CREF Investment Management, LLC, and Teachers Insurance and Annuity Association® (TIAA®). TIAA, TIAA-CREF, Teachers Insurance and Annuity Association, and TIAA-CREF Asset Management are registered trademarks of Teachers Insurance and Annuity Association.