SACRAMENTO, Calif. - CalPERS staff proposed boosting its commitment to CIM California Urban Real Estate Fund by up to $280 million, from $125 million. As an alternative, staff recommended allocating $150 million to a new $800 million CIM fund if the board of the $131 billion California Public Employees' Retirement System, Sacramento, were to reject the increased commitment.
The alternative proposal to raise a new fund also hinges on whether the $90 billion California State Teachers' Retirement System, Sacramento, is willing to boost its $45 million commitment to the first CIM fund by $100 million. Sherry Reser, CalSTRS spokeswoman, said the issue was not discussed at the fund's open meeting and declined to comment further.
CalPERS staff also requested that either fund be permitted to invest up to 40% of assets outside of California, up from 10% of assets currently.
In earlier action, the investment committee of CalPERS approved a proposal allowing some of its core real estate managers to invest in Canadian and Mexican properties. The committee also endorsed a proposal to sell an undisclosed stake in its $900 million retail mall portfolio to Miller Capital Advisory, the portfolio's manager, to better align the manager's interests with those of the system.
CalSTRS to acquire Lazard Freres stake in joint venture
SACRAMENTO, Calif. - CalSTRS will buy out Lazard Freres Real Estate Investors' interest in a joint venture real estate fund with DP Partners. Terms were not disclosed. DP Partners retained a significant undisclosed ownership interest in the fund and will manage the properties. The venture, now called DP Industrial, comprises 105 industrial buildings.
DP Industrial's core markets are Nevada, California, Indiana, Georgia and Pennsylvania, but fund managers will begin pursuing properties across the United States. According to a statement, the joint venture between DP Partners and the $90 billion California State Teachers' Retirement System, Sacramento, plans to develop and lease three million square feet of industrial space annually over the next five years.
Earlier this year, CalSTRS, in a joint venture with Thomas Properties Group, acquired the 2.7 million square-foot Arco Towers in downtown Los Angeles, said Sherry Reser, spokeswoman for the system.
The acquisition, valued by industry sources at $270 million, is the first for the new partnership, which will focus on opportunistic and value-added office space.
Sacramento County shifts allocation from PMRealty
SACRAMENTO, Calif. - Sacramento County Employees' Retirement System will shift real estate assets run by PMRealty to SSR Realty, the fund's other real estate manager, said Jeffrey States, chief investment officer.
PMRealty, which is closing, was managing about $98 million for the $3 billion system, and SSR, a little more than $200 million, both in core strategies.
Trustees also decided to review the pension fund's real estate strategy and determine what investment style they might want if they add a second manager. Trustees will adopt a plan and lay out a timeline at their March 20 meeting.
They also will consider whether to hire a specialized real estate consultant, Mr. States said; the fund's general consultant is Mercer Investment Consulting.
San Francisco broadens stake in AMB joint venture
SAN FRANCISCO - San Francisco City & County Employees' Retirement System expanded its stake in a joint venture with AMB Property to 80%, from 50%, said Don Holcher, the system's senior investment officer for real estate.
The $9.6 billion system contributed an additional $110 million to the venture, of which $38.9 million will go to AMB to pay for the expanded stake; the remainder will be used to purchase additional properties. The system already had $73.2 million invested in the AMB partnership.
Funding will come from rebalancing.
TIAA-CREF buys Benaroya Kent Valley portfolio
NEW YORK - TIAA-CREF, New York, purchased the 1.53 million-square-foot industrial property portfolio owned by Benaroya Capital in the Kent Valley for $81.04 million, or $53 a square foot, said Jim Tolve, spokesman for the Teachers Insurance & Annuity Association-College Retirement Equities Fund.
The property, located outside Seattle, includes seven office and warehouse buildings on 73 acres.