NORTH AMERICA – The California State Teachers Retirement System (CalSTRS) has invested $200m (€153m) into real estate over the first quarter.
The pension fund approved an investment of $125m into the Community Retail Development joint venture, managed by Sarofim Realty Advisors.
CalSTRS holds a 95% ownership stake in the venture in return for its equity, while Sarofim holds the other 5%.
The venture invests in retail properties located in densely populated, urban Hispanic markets in California and the US West.
CalSTRS believes the strategy for the JV holds a lot of promise for the development of a number of income-producing properties, according to Ricardo Duran, a spokesperson at CalSTRS.
He added that the partnership was an investment in California and significantly, in an under-served area that brings with it “great growth potential”.
CalSTRS made the investment based on the recommendation of its independent real estate fiduciary, Bard Consulting.
It said it expected the investment to reap an 8-12% return before fees.
CalSTRS also made a $75m co-investment into the Paladin Latin America IV.
The capital will be invested into two different strategies.
One is a housing joint venture targeting the rapidly growing middle class and the demand for affordable housing in Latin America.
The other encompasses opportunistic investments for select commercial properties and distressed situations.
The strategy covers real estate in Latin America, but is heavily weighted towards the housing market of Brazil.
The pension fund is aiming for a return in excess of 15% before fees.
CalSTRS has a real estate portfolio valued at more than $22bn, as of the end of March.
This represents 13.6% of its $164bn of total plan assets.
It has a targeted allocation for real estate of 11%.