The $242 billion California State Teachers’ Retirement System is planning to bolster its investment in REITs and increase its target allocation to real estate, according to board meeting documents.

In September, CalSTRS said it was considering alternatives for a new four-year asset allocation cycle beginning in January 2020. The pension fund said it would begin discussing alternative allocations, followed by a formal adoption of long-term asset allocations, which includes real estate.

The pension fund has earmarked up to $500 million for investment in publicly traded REITs through two managers, CenterSquare Investment Management and Principal Global Investors. CalSTRS’ investment team implemented a REIT investment strategy earlier this year, which will focus on selective investments in REITs that are perceived to be undervalued. Prior to that, the pension fund never had a strategic REIT allocation.

CalSTRS said REITs could be deployed immediately to achieve