By Jon Peterson
California State Teachers Retirement System has made new real estate commitments totaling $850 million and is planning to allocate at least part of this capital in San Francisco and Seattle.
The new commitments were $400 million for CP Logistics Platform, $200 million for ParkCal and $250 million for Datacore Fund, according to a document from the pension fund.
CP Logistics is a new joint venture with the pension fund and Des Moines-Iowa based Principal Real Estate Investors. The ownership split of the venture is 95 percent to the pension fund and 5 percent to the real estate manager. CalSTRS wrote in an e-mail that the markets of San Francisco and Seattle would be considered if opportunities arise within them.
The pension fund considers this venture to be a value-add investment. Per investment policy, CalSTRS looks for returns in this sector of its real estate in the range of 9 percent to 12 percent net IRRs.
The investment strategy for CP Logistics is to invest in industrial properties in major industrial markets throughout the United States. The joint venture will focus on build-to-core and build-to-lease investments. Once these properties become stabilized, the assets will be moved into the pension funds core sector of its real estate portfolio.
ParkCal is a new joint venture with CalSTRS and New York City-based J.P. Morgan Asset Management. This is a new relationship between the two firms. Any assets in the relationship will be 97 percent owned by the pension fund and 3 percent by real estate manager. The leverage on the venture is not planned to exceed 65 percent.
Part of this capital could be invested in the San Francisco Bay Area and Seattle. The venture will place capital into well-located, dominant office assets through value-add or development strategies across the United States.
Datacore is considered to be a core investment fund. It invests in data centers and other technology advantaged real estate around the United States. San Francisco and Seattle are planned to be two of its targeted markets for this capital.
This is a follow on investment for CalSTRS, which had previously invested $250 million to the fund. The pension fund holds a 99.5 percent ownership stake in the relationship. The real estate manager, San Francisco-based GI Partners, owns the balance.