REAL ESTATE – The California State Teachers Retirement System has expanded an existing joint venture with BlackRock Realty to invest in apartments that will have a total capitalization of $1.2bn (€1bn).
There is a total of $420m of equity in the expanded venture. CalSTRS will contribute 95% - or $400m - to the venture with BlackRock contributing the balance. Leverage on the venture will be in the range of 65% to 70%.
Around $100m has already been invested. The transactions have involved new apartment properties in New York and Chicago.
The initial venture between CalSTRS and BlackRock Realty included an equity investment of $105m, which has now been invested.
BlackRock figures that the majority of the deals for the expanded venture will be to invest equity into new apartment developments.
BlackRock Realty will be looking for transactions that can produce a leveraged IRR in the range of 14%. This yield assumes a three- to five-year holding period.
A typical size transaction for the venture is in the neighborhood of $50m-$80m. The focus on the deals will be on urban projects around the US.