Pension board hears real-estate manager report, approves $1 million rebalancing to cover benefits

Trustees at a Punta Gorda City pension board meeting heard an investment presentation describing performance and risk factors for a large private real-estate fund and approved a $1 million rebalancing to cover near-term benefit payments.

An investment presenter reviewed the fund’s history and metrics, saying the plan committed $1,250,000 in 2012 and has received net distributions of almost $900,000. He reported the fund’s net asset value was $2,685,014 as of March 31 and said since-inception net returns have beaten the manager’s benchmark over both 10-year and since-inception windows.

The presenter told trustees that real estate had experienced eight consecutive quarters of negative returns—driven largely by rising interest rates and a roughly 30% peak-to-trough valuation decline on average—followed by five consecutive quarters of positive returns, which he said suggests the market had bottomed and was beginning a recovery. He called out portfolio metrics: roughly 150 properties, about 15 million square feet, approximately 15,000 residential units, portfolio occupancy around 90%, and a weighted average lease term of about 6.6 years, which he said supports steady income even when valuations are pressured by rates.

Trustees pressed the presenter on delinquencies and debt structure. He said commercial delinquency was “virtually none,” multifamily tenant delinquency was under 5% of units, about 90% of the fund’s debt is fixed-rate and 10% floating, the weighted-average cost of capital is near 4.2%, and aggregate leverage is approximately 27%.

Board staff reported plan cash near $208,000 and advised the board it likely needs about $1 million to cover upcoming benefit payments. Staff recommended raising that cash by liquidating international equity exposures: $400,000 from EuroPacific and $600,000 from Transamerica. A trustee moved to implement that recommendation; another trustee seconded. The chair called the question, trustees signified assent, and the motion passed.

The board also requested the presenter provide the meeting materials electronically; the presenter said he would send a PDF to staff.

Next procedural steps: staff will instruct custodial managers to implement the rebalancing and confirm the transfers at the operational level. The board did not change the investment policy during the meeting.