By Muskan Arora
Denver Employees Retirement Plan earmarked $240M investments into real estate over the next six years, with an aim to reach the target allocation of 10%.
According to recent meeting materials, the pension plan disclosed the plan of allocating $40M annually to real estate through 2029. Under the plan, each year the plan will strategically deploy the pacing — 10% in year one, 30% in year two and 60% in year three.
This approach is designed to avoid vintage-year concentration risk and ensure a smooth injection of capital into the portfolio.
The model will help the pension plan’s goal of maintaining the real estate portfolio at 10% of the total portfolio, along with an internal target of allocating 60% of the real estate portfolio to core strategies. As of March 31, 2025, the pension plan allocated 7.2%, or $193M, to its real estate portfolio, with the long-term target ranging from 5% to 15%.
Through its real estate portfolio, the pension plan remains bullish on the retail and residential sectors.
“Retail is largely driven by grocery-anchored neighborhood shopping centers in densely populated urban and suburban locations,” said the meeting materials, which also noted that high-end retail shopping centers are also performing well, as consumers often prefer to purchase luxury items in person.
“Low unemployment, a temporary boost from the build-up of inventory ahead of tariff increases, and low levels of construction (keeping the vacancy rate at 6.6%) have provided tailwinds for the sector.”
Within real estate, the pension plan’s target allocation to core and non-core strategies is 40% each with the remaining 20% target allocation to debt strategies. Current allocations tilt heavily toward core strategies (58%), followed by non-core (29%) and debt (13%).
A few funds on the real estate roster include UBS Trumbull Property Trust, which invests in commercial real estate including industrial properties; Prudential PRISA II, which invests in retail, industrial, and multifamily properties; and Contrarian Distressed Debt IV, which invests in hospitality and retail properties.
