USAA to sell controlling interest in real estate investment arm

USAA to sell controlling interest in real estate investment arm

The United Services Automobile Association (USAA), a financial services provider for U.S military community and their families, headquartered in San Antonio, Texas, announced Thursday that it has agreed to sell a controlling interest in USAA Real Estate (USAARE) to the current management of USAARE and a private investment group.

USAA will retain a significant ownership stake in USAARE. Len O’Donnell, President and CEO of USAARE, will continue to lead the business, and the company will remain the exclusive investment manager for USAA’s real estate portfolio.

USAA expects minimal employee impact from the transaction. USAA Real Estate is planning to maintain its current workforce.

”The move continues to simplify USAA’s operating structure enabling it to better serve members through its core businesses of banking, auto, home and life insurance, and retirement products,” said USAA in a statement.

“We believe both USAA and USAA Real Estate are best served by creating this strategic relationship and enabling the investment management business to operate more independently,” said USAA CEO Stuart Parker.

“We remain as committed as ever to producing great results for USAA and its members,” said USAA Real Estate President and CEO Len O’Donnell.  “This change enables us to provide an even greater level of service to our clients and partners as we strive to maximize performance for their portfolios. It creates a deeper and richer alignment between our clients, USAA and the management team, from which all will benefit immensely.”

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The transaction is expected to close in early 2020, subject to certain regulatory and other customary Board approvals, conditions and consents.

USAA Real Estate was founded in 1982 as the real estate investment arm of USAA. With more than $20 billion in assets under management, the company provides co-investment asset management services to U.S. pension funds, as well as to foreign and domestic institutional investors.