UNITED STATES - California State Teachers Retirement System has grown its opportunistic real estate portfolio by $154m (€100.2m) through two new commitments, including one to a new development project in Washington DC.
The pension fund has signed a commitment with a new real estate manager Trigate Capital, to place 111.5m commitment in the Elm Street opportunity fund.
CalSTRS' independent fiduciary, Bard Consulting, recommended the move to TriGate as which is headed by chief financial officer Jay Henry, formerly a senior acquisitions officer for Morgan Stanley Real Estate for several years, working on MSREF's series of opportunity funds.
This commingled fund is TriGate Capital's first move to attract institutional capital, even though its principals have experience of working with institutional investors.
Elm Street fund is expected to raise approximately $350m, to invest primarily in US assets such as real estate operating companies, financial restructuring, distressed opportunities, development and redevelopment projects and real estate securities.
At the same time, CalSTRS has also made a $42.5m investment into a new development project in Washington DC called M Street - a mixed-use project of office, retail and multi-family components.
Developer on the project is DC-based Akridge Companies, which has been an active player in this market for over 30 years and it is anticipated the capital from CalSTRS covers the land acquisition and predevelopment costs.
The pension fund's allocation is a co-investment along with the American Value Partners I commingled fund. This $400m commingled fund closed earlier this year by AVP Advisors, and saw CalSTRS make a $100m commitment to the fund.
So the investment with Akridge falls in line with a part of the commingled fund's strateg which is to invest in real estate operating companies that have a long history of investing in a single market or niche sectors.