NEW YORK CITY-Manhattan-based REIT Lexington Corporate Properties Trust has expanded its joint venture with the New York State Common Retirement Fund, upping its buying power by an aggregate $200 million. The partnership expects to have purchased up to $985 million in real estate within the next two years.

“We established the joint venture in August, 1999,” Lexington president T. Wilson Eglin tells “The Fund committed $100 million in equity to the program and we committed $50 million to the program. To date, we have invested $109 million of the initial $150 million of committed equity.”

The venture, created to invest in office and industrial properties net leased to major corporations, has nine acquisitions under its belt and several more in the works, though Eglin would not provide details on upcoming buys. “Now, we have another $200 million in equity, $150 million of which will come from the Fund,” Eglin says. “We have a variety of deals in the pipeline that will close in the next 60 to 90 days, but it will take a couple of years to invest the committed capital. We plan to continue to use mortgage financing of about 65% in our acquisitions, which means this adds about $560 million of additional investment capital.”

The fresh infusion of cash expands the venture far beyond its originally stated parameters. When Eglin revealed the alliance in July 1999, its goal was to invest up to $425 million in real estate. The fund has already acquired nearly $300 million worth of real estate and has yet to spend out its original stake.

This year alone the venture spent nearly $100 million on two investments. In January, it purchased a 340,000-sf office complex in Parsippany, NJ for $81 million. The building is leased by Aventis Pharmaceuticals Inc. until 2010.

The venture’s most recent acquisition was completed in May with the $14.4-million purchase of a newly constructed 344,7000-sf distribution facility with a 10-year net lease to Kraft Foods. That purchase brought the joint venture’s total spending to date up to $284.6 million, according to documents released by the REIT.

Lexington, is a self-managed trust that owns and manages a diverse portfolio of 98 US properties in 30 states that are net-leased to major corporations. Its holdings total approximately 15.7 million sf of space.

State Comptroller Carl McCall is sole trustee of the $112 billion Common Retirement Fund, which invests the assets of nearly one million retirees and members of the New York State and Local Retirement Systems. “This program has contributed to the enhanced returns and overall diversification of the Fund’s real estate portfolio,” McCall says.

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