NORTH AMERICA – The California State Teachers Retirement System has approved new real estate commitments totalling $105.6m (€80.9m).
The most significant of the new investments is a $74.6m investment into the CampusCal 2 LLC, a joint venture between CalSTRS and key principals of Campus Advantage to invest in student housing projects in the US.
The total size of the new capital planned for the venture is $75m.
The strategy to invest in off-campus university student housing located at top universities and colleges around the country.
The long-term expected return on the venture is 7-9% before fees.
CalSTRS started its relationship with Campus Advantage in 2007 and since then has invested more than $103m of equity into the strategy.
The other two new investments involve industrial properties.
One of these was the $12.3m acquisition of the 251,000 square foot 2707 Eola property in Chicago, a separate account investment with Principal Global Investors acting as the manager.
On a short-term basis, the property is considered a Class A core property.
The long-range plan is to re-lease, expand and sell the asset with returns beating the ODCE Index benchmark.
The other investment was an $18.7m purchase of 31.9 acres of land in Katy, Texas, a suburb of Houston.
The plan for the future is to build a 420,000 square foot industrial warehouse on the site.
CalSTRS wants to build a core asset that will generate stable cash flows.
Upon completion, the pension fund will own 100% of the complex.
CalSTRS has a real estate portfolio valued at $22bn, as at the end of 2012.
This portfolio makes up 13.95% of the pension fund's $157.8bn of total plan assets.
The pension fund has a targeted allocation of 11% for real estate.
