California State Teachers Retirement System (CalSTRS) is investing a further $650m (€537.6m) into an existing core US office investment joint venture with Beacon Capital Partners.
The pension fund told IPE Real Assets it has made the allocation to the BCal II venture to allow the “joint venture to stand ready to react to upcoming market opportunities”.
CalSTRS, which owns a 95% interest in the venture, said: “The joint venture does have the flexibility to invest in office, medical office and lab office space. This Beacon venture has a history of delivering core plus returns and also executes build-to-core development strategies that deliver double-digit returns.”
As of the third quarter of last year, CalSTRS was already over-allocated to office assets. It had invested 38% of its $36.1bn total real estate portfolio in office assets, compared with the ODCE Index’s 34%.
CalSTRS said it has moved a $396m allocation from the PCCP core real estate joint venture PacificCal PC Core to PacificCal VII, a value-add real estate strategy targeting a variety of property types.
“We moved the allocation to a strategy that has higher risk-return attributes,” the pension fund said.
CalSTRS has also allocated $300m to Cal Hearthstone Debt JV, a newly formed debt joint venture with Hearthstone. Cal Hearthstone Debt will be investing in a mixture of single-family detached homes, townhomes and condominiums.
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