UNITED STATES - California State Teachers Retirement System has expanded its joint venture industrial program beyond First Industrial Trust by creating a new relationship with Sealy & Company.
The pension fund has made a $200m (€134.8m) equity investment in the venture, assisted by Principal Real Estate Investors while Sealy has put in $10m of its own equity into the relationship to give an equity split of 95/5 to CalSTRS.
Total capitalization on the SeaCal non-discretionary venture is $600m but the separate account venture will employ 65% leverage and every deal must be agreed by both parties, according to John Frandson, managing director of portfolio management at PREI.
"The pension fund had informed us that they were looking to add to its industrial investment program. We went out into the market looking for a new company that focuses on industrial properties. And Sealy is a good fit."
CalSTRS is still looking to put out more capital into industrials in the future so could look to grow its relationship with Sealy or to setup another venture with a company focused on industrial assets.
While there are currently no assets in the relationship, four or five deals now being considered and it is understood SeaCal's investment strategy is around 75% of the deals will be in the acquisition of existing assets that have a value-added component so they can, long term, be turned into core assets and sold in the future.
SeaCal will be investing in a variety of industrial properties so will, in some cases, invest in warehouse/distribution assets while oher deals will include service centre-type space.
The JV will be focusing on assets purchases in the Southeast, South-central and Southwest parts of the United States, namely in the Houston, Dallas, San Antonio, Austin, Atlanta, Nashville, Jacksonville, Tampa and Orlando markets where CalSTRS does not already own many industrial assets.
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