CalSTRS invests in expansion of West Sacramento HQ campus

The $229.2 billion California State Teachers’ Retirement System board has approved construction of a nearly 275,000-square-foot expansion of its West Sacramento headquarters. The building’s expansion of rentable office space is tightly budgeted not to exceed $300 million. CalSTRS plans to use only part of the new space and lease out the remainder.

The decision to expand and build a second office tower will make more than 200,000 square feet available for lease. CalSTRS expects demand to be high given the lack of class A, LEED office space available in or near the downtown area.

“There is no comparable office space available for lease in the Sacramento region that sits right in the urban core,” said CIO Christopher Ailman. “This expansion will allow the investment office to continue to grow our internal management.”

CalSTRS is expanding its headquarters in order to grow, attract and retain talent. The more investments CalSTRS can manage in West Sacramento, the less it has to pay external Wall Street firms, said Ailman. “In fact, each internal investment manager added saves the fund about $1.2 million in external management fees per year.”

Estimated completion for the expansion is expected in mid-2021.