UNITED STATES - California State Teachers Retirement System has expanded its real estate joint venture relationship with Pacific Coast Capital Partners by investing a total of $500m (€353m) into two ventures.
Its first $200m investment is moving into the PacificCal III fund which has a capitalization of $204m - leaving Pacific Coast Capital to invest the balance.
Assets from the venture will then be used to buy mid-sized value-added and opportunistic office, industrial, retail and apartment transactions in urban locations, typically with a purchase price of $10m-$20m.
CalSTRS, assisted by its San Francisco-based real estate independent fiduciary Bard Consulting, believes there is little pension fund capital pursuing deals of this size as most funds are looking for larger deals.
More specifically, the partnership expects to invest in the western US NCREIF region and Texas.
This is the third JV that CalSTRS has created with Pacific Coast Capital using the same strategy.
This latest deal follow an earlier joint venture with Pacific Coast Capital called PacificCal Land which saw $300m invested by CalSTRS into a £306m scheme.
Strategy of this partnership is to invest in land entitlement and land development opportunities in the west of the country which could be used for future commercial or residential projects.
This is a strategy many pension funds are turning their attention to, as similar funds are buying land now to hold onto, until the demand for new construction picks up in the future.