AUGUST 30, 2013

CalSTRS invests $620 million to real estate in second quarter

by Andrea Waitrovich

The $165.8 billion California State Teachers’ Retirement System (CalSTRS) has committed $620 million for its real estate portfolio as of June 30, 2013. Activity was predominately in lower-risk investments with nearly 90 percent of the commitments in core and value-add follow-on investment vehicles during the second quarter.

Of the $620 million, CalSTRS committed more than $400 million in follow-on core real estate strategies, including $20.2 million to CSOV Bouwfonds II, managed by Fairfield Residential; $198 million to PacificCal PC Core, a debt real estate joint venture with PCCP; and $200 million to LCOR Project Platform, a develop, renovate and redevelop residential partnership with GI Partners.

CalSTRS made an initial commitment to CSOV Bouwfonds in 2007 with a $75 million investment.

For its value-added portfolio, CalSTRS made two follow-on investments to PCCP and Fairfield Residential totaling $123 million. The pension fund invested $25 million in the multifamily Fairfield partnership, CSJV BF InvestCo T2, and $98 million to PacificCal IV, which is partnered with PCCP.

The sole opportunistic transaction during the second quarter was a $75 million investment in ResCal, a $204.1 million joint venture with Resmark, a Los Angeles–based real estate investment adviser focused on residential and retail real estate in the western United States.

CalSTRS’ core portfolio currently holds 110 investments with a net asset value of $8.7 billion, an increase from $7.6 billion in June 2012, and its value-added portfolio currently holds 47 investments with a net asset value of $3.5 billion, which is a decrease from $9.9 billion in June 2012. Opportunistic investments represent the largest portion of its property portfolio with a net asset value of $10.4 billion, an increase from $8.8 billion in June 2012. CalSTRS has a target allocation to real estate of 15 percent and has an actual allocation to real estate of 13.82 percent, or $165.8 billion. 

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