SACRAMENTO, Calif. -- The $157 billion California Public Employees' Retirement System is expanding its single-family housing construction financing and development program to other states; may add financing for mobile homes; and will boost in-state initiatives.
Trustees approved a target investment allocation for the single-family housing construction financing and development program to 10% of its real estate allocation. They also combined a housing construction financing program and a land acquisition and development program.
Trustees also approved the drafting of regulations that include mobile homes as a type of dwelling eligible for CalPERS' Member Home Loan Program, which has made $5.4 billion in home real estate loans since it began in 1981.
Separately, the retirement system's staff recommended the investment committee approve a $320 million investment in three California community real estate initiatives.
They are: $120 million in California Urban Investment Partners, which invests in retail properties in underserved areas; $100 million in CommonWealth Partners, which focuses on urban southern California; and $100 million in California Community Initiatives Fund, which provides mortgages. The staff also recommended investing $75 million in Silver Lake Partners, a technology buyout fund whose principals are affiliated with Kleiner Perkins.
Since the beginning of the year, the system has purchased more than $1 billion in real estate assets, according to a report released by the fund. California apartment, office, retail and industrial buildings comprise $518 million.
Guy Jaquier, senior investment officer for CalPERS real estate, said the system has taken a defensive approach in its real estate purchases, with more than 40% including grocery-anchored retail centers and industrial buildings --properties that are resistant to downturns. Of the 41 properties purchased, 21 are in California. The new acquisitions follow a two-year review of the system's real estate program.
The new core purchases include: $132 million in apartment properties purchased through SSR Realty Advisors and General Investment & Development; $201 million in industrial properties, purchased through RREEF Funds and LaSalle Advisors; $226 million in retail properties purchased through Burnham Pacific; $391 million in office properties purchased through Hines and Commonwealth Pacific; and $100 million in real estate investment trusts.
CalPERS also has appointed Denise M. Arend to divisions chief. She will manage investment contracts, monitor and report on investment transactions, performance and asset allocation. Ms. Arend previously was director of the office of small business at the California Trade and Commerce Agency. She has replaced David Mullins, who was promoted to divisions chief of the system's supplemental savings programs, which includes CalPERS' deferred compensation program.
Lend Lease Real Estate to acquire Boston Financial
NEW YORK -- Lend Lease Real Estate Investments Inc. has reached a memorandum of understanding to acquire Boston Financial Group, one of the largest U.S. apartment investment managers. The companies declined to disclose the terms of the deal.
Lend Lease Real Estate Investments also has formed Lend Lease Global Properties, a Luxembourg-based global real estate opportunity investment company, which will invest internationally. It has already raised $255 million, which gives it $500 million for investments using leverage.
The New York State Teachers' Retirement System, Albany, has approved a commitment of up to $50 million in the new fund, said a spokeswoman for the $71 billion fund. Lend Lease has co-invested $50 million. The new fund's first commitment is an office campus development four miles north of Heathrow Airport in London.
Davis launches Islam-compliant REIT
NEW YORK -- Davis Selected Advisers, working with the United Bank of Kuwait, has launched an Islam-compliant real estate investment trust portfolio totaling $10 million. It targets institutional and individual investors in Saudi Arabia, Kuwait, Bahrain and other countries in the Persian Gulf, said Frank Higgins, head of real estate with the United Bank of Kuwait's New York office.
Davis picks the REITs, all from the United States, and the United Bank of Kuwait markets the portfolio and screens the REITs for meeting Islamic code, Mr. Higgins said. Gaming and casino holdings are not allowed, and only up to 4%of income from each REIT is allowed to come from interest.
Kennedy-Wilson acquires JLW California
BEVERLY HILLS, Calif. -- Kennedy-Wilson International, a real estate services firm, acquired Jones Lang Wootton California from Jones Lang LaSalle, a real estate services and investment management firm. Kennedy-Wilson's acquisition of JLW's 7 million square feet of office and industrial properties expands its national management portfolio to about 60 million square feet. Terms of the transaction were not disclosed.
