LOS ANGELES—A new report from Unite Here shows that Lowe Enterprises Investors, a real estate manager with a roster of institutional clients, is dramatically underperforming compared to similar companies. According to the report, the manager has lost 8% of its asset value over the last two years, while a broader look over the last cycle reveals lost properties, money-losing funds and general underperformance when compared to its peers.

Lowe Enterprises Investors is, of course, a highly regarded firm known for managing separate accounts on behalf of its institutional clients, pension funds in Ohio and Pennsylvania and insurance companies Allstate and Guardian. However, according to Unite Here, the company's Ohio account underperformed in the last three and five year periods, while its Pennsylvania accounts underperformed in the last one, three and five year periods. By comparison, according to Charlie Carnow, a research analyst for Unite Here, “the second-worst comparable Pennsylvania SERS, the UBS Trumbull Property Fund, on a five year basis posted a 5-year return of 11.3%, 6.2 percentage points higher than Lowe's 5.1% return in the same period.”

When asked how the company could underperform and still experience such popularity among institutional clients, Carnow tells GlobeSt.com, "Looking at the data, I have no explanation." He adds, “What was most surprising to us was the underperformance of Lowe's separate accounts and commingled funds as well the magnitude of the losses Lowe posted on many investments made prior to the recession,” he tells GlobeSt.com. “For example, in 2007, Lowe paid $13.1 million for a 700-acre tract of development land in Palm Coast, Florida that it intended to develop into a master planned community. In April 2013, Lowe sold the tract for $408,000, a 97% percent loss.”

The report also claims that 2004 Lowe Hospitality Investment Partners generated a -16.3% IRR for its investors after returning only 55% of recalled capital at the end of 2014; a significant loss for its investors. Carnow explains that the firm made a significant investment in the Washington DC office market before the sequestration and the relocation of Homeland Security, which greatly impacted the area's office market. This could be one reason for the company's underperformance.

We reached out to Lowe Enterprises Investors for a comment, and they refuted the claims, telling GlobeSt.com, "Unite Here has distributed a report with their view of Lowe Enterprises Investors' performance that is based on inaccurate and incomplete information. Unite Here's tactic has been to selectively present information to the investment community and the media in a slanted and biased manner to advance their own agenda. Lowe Enterprises Investors is one of several investment managers being subjected to this kind of attack."

The company continues to make purchases nationally. Most recently here on the West Coast, it spent $76 million on office assets in Phoenix, AZ. The three office buildings total 437,603 square feet at the Phoenix Gateway Center.