CalSTRS outperforms benchmark for real estate despite market volatility

California State Teachers’ Retirement System (CalSTRS) real estate portfolio outperformed its benchmark of the NCREIF Open End Diversified Core Equity, according to the pension fund’s semi-annual performance report.

NCREIF Open End Diversified Core Equity is an index of investment returns of the largest private real estate funds pursuing lower-risk strategies over three-, five- and 10-year periods. CalSTRS’ real estate portfolio has outperformed its target return benchmark during the past decade, according to a third quarter 2022 semi-annual report from RCLCO Fund Advisors, on behalf of CalSTRS. The report notes that real estate net asset value, totaled $51.9 billion as of third quarter 2022, comprising 17.2 percent of the total CalSTRS Fund (roughly $302.1 billion). This exceeded the target allocation of 15 percent but was within the policy range of 12 percent to 18 percent.

The portfolio continues to be underweight relative to the benchmark in industrial and mu