R.B. Pamplin Corp. to Restore $20.6M in Pension Assets, Unwind Illegal Real Estate Investments

The Department of Labor concluded that Pamplin had used assets from its pension plan to acquire the company’s own real estate, exceeding limits under ERISA.

The partnership with Bridge Industrial will ‘target the acquisition and/or development of modern industrial facilities in supply-constrained markets across the U.S.’

The Canada Pension Plan Investment Board announced Thursday the formation of a joint venture with Chicago-based industrial real estate firm Bridge Industrial. The partnership, to which the duo has allocated $789 million, will invest in industrial properties in “several core markets across the United States,” per a statement from the CPPIB.

The partnership will target the acquisition and development of modern industrial facilities in supply-constrained markets across the U.S, “as retailers compete for faster shipping times despite increasingly limited space for new warehouse construction,” according to the statement.

This is the Canadian pension fund’s second venture with Bridge Industrial: In 2021, the duo formed a $1.1 billion joint venture to develop industrial properties for long-term ownership. In both joint ventures, CPPIB holds a 95% stake, while Bridge Industrial owns 5%.

“The industrial sector’s favorable market dynamics position this joint venture well to deliver strong returns for the CPP Fund,” said Sophie van Oosterom, the CPPIB’s managing director and head of real estate investments, in a statement.

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The CPPIB manages C$675.1 billion ($467.66 billion) in assets, as of September 30, 2024. According to the firm’s 2024 annual report, the fund allocated 8% of its assets to real estate, as of March 31, 2024. Like many Canadian pension funds, the CPPIB reported a loss from its real estate holdings; the asset class delivered a negative 5% return in fiscal 2024 and 0.5% annualized over a five-year period.

In its 2024 annual report, however, the CPPIB also noted the strength of investments in logistics, compared with other real estate holdings.

“Investments in the logistics sector were an exception as they experienced increased tenant and investor demand for most of the five-year period,” the report stated. “This contrasted with retail and office investments, which were negatively affected by the transition towards e-commerce and the impact of evolving hybrid workplace trends.”

The fund’s real assets portfolio, which includes both real estate and infrastructure, delivered a net 2% return in the fiscal year, which ended March 31, 2024, and 5.2% over the past five years, annualized. The returns of the real assets portfolio were “largely attributable to increases in energy and commodity prices as well as the performance of industrial assets that provide logistics and other essential services,” according to the annual report.