REAL ESTATE - The California Public Employees Retirement System has approved a $100m commitment into the Page Mill Properties II commingled fund.
The pension fund made this commitment as part of its opportunistic real estate investment strategy. It projects that the investment in the commingled fund will produce a 12.5% net return.
This investment will be the second time the pension fund has invested with the executives at Page Mill Properties. David Taran is the chief executive officer of the company. He had been the co-founder of Divco West Properties. This company had formed the Page Mill Properties commingled fund in 2003. CalPERS had made a $75m investment in the fund. The total amount of equity raised for this fund was $290m.
Page Mill Properties will have a core plus investment strategy for the second fund. It will use a variety of strategies to add value. There will be some deals that involve the acquisition of existing properties. The improvement will happen through a repositioning, redevelopment or the conversion for a better and higher use. The commingled fund will also make equity investments in new development projects.
Most of the deals for the fund will be fee simple transactions. There might be some cases where the commingled fund will create a joint venture with another capital source to acquire a property.
The vast majority of the investments in the fund will be with office buildings. Other potential property types to be considered are industrial properties and hotels.
Page Mill Properties II will be looking at investing capital in 11 targeted technology driven markets across the United States. These would include areas like San Francisco, San Jose, Denver, Boston and Austin, Texas.