GLOBAL - The California State Teachers' Retirement System (CalSTRS) has entered into a joint venture with the Panattoni Development Company to invest $1.15bn (€874m) in industrial and commercial real estate in the US and Canada.
Panattoni will seed the portfolio with core assets, and the PanCal agreement includes the option to increase the size of the capital of the joint venture.
The announcement comes several weeks after Panattoni's European operation entered into a joint venture with Pramerica Real Estate Investors to develop logistics warehouses in central and eastern Europe.
Panattoni chairman Carl Panattoni said: "We expect to see an increasing number of exciting opportunities in the near future. The joint venture will focus on bulk industrial, build-to-suits, value-add and core opportunities in the US and Canada."
He added: "The PanCal JV accomplishes a lot for our firm. First, it recapitalises many of our existing projects. It also provides a significant source of capital with a great partner, permitting us to take advantage of the market opportunities that are presented to us."
Principal Real Estate Investors and Eastdil Secured served as advisers to CalSTRS and Panattoni, respectively, in the formation of the joint venture.
Principal Real Estate Investors will continue to serve CalSTRS in an advisory role as part of the agreement.
The real estate portfolio of CalSTRS produced a loss of 12.4% for the 12 months ending 30 June 2010.
But the pension fund has spent the subsequent months making new investments in the asset class, including two US residential joint ventures with IHP Capital Partners and ResCal Investments and a commitment to a US-focused opportunity managed by the Fortress Group.
