UNITED STATES - California State Teachers Retirement System has expanded an existing joint venture with California-based Vintage Senior Advisors and invested more money in its senior housing venture.
The pension fund has made a further commitment of $150m (€108.1m) to a real estate project which gives the fund 90% ownership of a venture which gives people affected by Alzheimer's access to senior housing high-end assisted living.
CalSTRS total investment has now reached €225m, following a recommendation by its fiduciary adviser Westwood Consulting.
The pension fund sees attractive returns by tapping into the demographic shift of senior housing, suggests Vintage principal Eric Davidson, as it is expected the deals will produce leveraged returns pf 15-18% over a three to seven-year period, based on up to 70% leverage.
"There remains a growing population of senior citizens and not a lot of housing options for them," said Davidson.
Many of the properties are based in California, although some could be sourced along the West Coast in Oregon and Washington, and have a value-added component either new development project or improvements to existing properties through renovation, improved management or additional assisted living services.
One of the Vintage JV's latest purchases is a 178-unit facility in Walnut Creek, California for $60m through debt and equity, which is not yet licensed in the State of California but is expected to provide value addition as it should take the best part of 90 days to get its licence.