UNITED STATES - California State Teachers Retirement System (CalSTRS) has made one new real estate investment and transferred one existing asset to a different manager during the second quarter of 2009.
The pension fund made a €15m investment in to the Eurocastle Investment Limited a Euro-denominated Guernsey closed-end investment company. The total equity raise for this entity is €130m.
The new capital raise will facilitate a recapitalisation of the partnership including the pay down and refinancing of the credit facility.
According to pension fund officials, the goal of this investment is diversification through investment in real estate outside the US.
The commingled fund invests in convertible securities. The pension fund is expecting to achieve a 20% return on its investment.
CalSTRS made its investment in Eurocastle based on the recommendation of its real estate independent fiduciary, Courtland Partners.
In a separate development CalSTRS has moved the management of the 543,000 ft2 Lincoln Place office building in Washington, DC from Lowe Enterprises Investment Management to Jones Lang LaSalle.
According to pension fund officials, Lowe Enterprises is better suited for the management of its resort assets. Lincoln Place is a government building, for which Jones Lang LaSalle is considered a better fit in terms of management expertise.
The office building, which was valued at US$252m has been in the pension fund's portfolio since 1998 when it was acquired for $156m. The building is now 100% leased.
CalSTRS is now considering transferring other existing assets although no further deals have been confirmed at this time.