REAL ESTATE - The California Public Employees Retirement System figures to be part of a new initial public that should be coming to the market in January.
The new REIT being created is called Meruelo Maddux Properties, Inc. The total number of shares being sold are 40m. It looks for CalPERS to be a small minority stakeholder in the new company, but the giant pension fund is not commenting.
CalPERS and Meruelo Maddux do have some history together. In 2004, the pension fund setup a $150m(€116m) revolving line of credit with Meruelo Maddux. This capital has been used by the real estate company it its growth efforts. The relationship between the two companies was a direct one. A portion of the proceeds from the IPO will be used to pay down the debt on this capital.
CalPERS made the investment in Meruelo Maddux as part of its California Urban Real Estate investment program. The strategy for CURE is to invest in urban real estate in California. This is done through a variety of real estate companies.
The strategy typically involves the development and redevelopment of urban assets. This can be a mixture of office, industrial, retail and residential projects.
Muruelo Maddux Properties will be a firm with a total market capitalization of around $500m. All of the company’s assets are located in Southern California, with a good portfolio of them are located in downtown Los Angeles. The company owns 80 acres of land in this region.
Going forward the company plans to get involved in a variety of projects. This would include the development and redevelopment of commercial and residential projects in urban locations.
This would include the development of a new project and the redevelopment of an existing asset for a better and higher use. The company would only consider properties that are located in Southern California.