California Public Employees' Retirement System is hunting for industrial properties, forming its own corporation, Institutional Logistics Partners, and making an initial $250 million investment to buy core properties in large U.S. markets, Joe DeAnda, a spokesman for the $254.9 billion Sacramento-based pension fund, confirmed Tuesday.
Over a four- to five-year period, CalPERS could invest up to $3 billion in the industrial properties, said Michael McKee, CEO of Bentall Kennedy U.S.U.S. in an interview. The firm has entered into a strategic partnership with the retirement system to buy the industrial properties. CalPERS own a one-third interest in Bentall Kennedy.
The partnership is part of CalPERS' revised real estate philosophy that is aimed at concentrating on core income-producing real estate assets. The revised policy was put in effect in 2011 following massive real estate losses during the recession.
Under the partnership, CalPERS will invest 99.5% of the money with Bentall Kennedy making a 0.5% commitment.
The partnership closed on its first investment about a week ago. It purchased Northgate, a 1 million-square-foot industrial warehouse facility in Riverside, Calif., for $69 million from KTR Capital Partners.