Massachusetts Pension Reserves Investment Management Board, Boston, made its first direct real estate investment, said Eric Convey, spokesman for the $62 billion pension fund.
MassPRIM purchased 21 acres and a related ground lease in Santa Clara, Calif., for $112.25 million in cash.
The land is occupied by three Class A five-story office buildings totaling 449,000 square feet at 5451-5455 Great America Parkway in Santa Clara in Silicon Valley. The buildings are leased to high-tech companies, including Dell and Arista, by Irvine. Co, which owns the buildings. As of Wednesday, the buildings' owner is leasing the land from PRIM under a contract that extends 64 years through 2081. DivcoWest advised MassPRIM on the deal.
“By purchasing and owning this land directly rather than through an investment manager, PRIM stands to save approximately $11 million in investment management fees over the next 20 years,” said Michael G. Trotsky, MassPRIM's executive director and chief investment officer, in a news release announcing the deal.
Real estate investments comprise about 10% of the pension fund.