CalSTRS backs real estate strategies with $400m
UNITED STATES – California State Teachers' Retirement System (CalSTRS) made $400m (€308m) worth of new commitments to core, value-add, opportunistic real estate and student housing strategies during the third quarter of 2012.
They included a $100m investment in the Invesco Core Real Estate USA, a $3.8bn open-ended fund managed by Invesco Real Estate.
The move comes several months after CalSTRS selected Invesco Real Estate to be one of its 10 separate account managers for core real estate in July this year.
Ricardo Duran, information officer at CalSTRS, told IP Real Estate the fund strategy suited the pension fund's objective to expand its core exposure, while the geographic and sector diversification it offered fitted well with CalSTRS’s risk management strategy.
The Invesco USA Fund is weighted towards major markets and coastal regions, targeting well-leased core multifamily, office, retail and industrial assets. CalSTRS is projecting a 7-9% return on the investment before fees.
CalSTRS also made a follow-on commitment of $75m to its $230m student housing development joint venture with Principal Real Estate Investors.
The strategy of the UCal joint venture is to acquire properties located near a university campus that can be renovated to add value and maintain strong occupancy. It will also establish fee arrangements with developers to build new projects close to the campus.
Duran said the strategy had proved successful over the past five years.
CalSTRS also committed $125m to the value-added TPG CalSTRS Austin joint venture. This capital will be used to acquire a portfolio of office buildings in Austin.
Duran said Texas has one of the strongest state economies and Austin is a top-tier city in the state.
The pension fund also committed $100m to opportunistic fund TriGate Property Partners II, which invests in distressed debt and equity of existing properties in the southeast region of the US.