CalSTRS to invest $795m in US real estate via PCCP and Beacon Capital

California State Teachers Retirement System (CalSTRS) is investing close to $800m (€648m) in US real estate through a new partnership with PCCP and a value-added fund managed by Beacon Capital Partners.

A document provided by the pension fund shows it is investing $495m in real estate debt through a joint venture with PCCP called PacificCal Debt II. It is also committing $300m to Beacon Capital Strategic Partners VIII fund.

In October last year, CalSTRS created a joint venture with PCCP, known as PacificCal VI, to invest in value-add real estate.

PCCP declined to comment on the latest partnership.

CalSTRS, which usually holds partnership stakes of more than 90%, will be a majority owner in PacificCal Debt II, which will lend on core real estate assets.

Beacon Capital Partners, which declined to comment on its latest fund, is raising capital for Beacon Capital Strategic Partners VIII.

The fund had a first close in November of last year with total commitments of $990m, according to sources that track fundraising in the US.

Beacon Capital had an initial target of $1.25bn, which was later increased to $1.5bn. The fund has a hard cap of $1.75bn.

The fund, which has yet to acquire any assets, will invest in US office buildings with a value-added strategy.

It is targeting a net internal rate of return of 12-13%. 

In 2015, CalSTRS invested $150m in the previous fund, Beacon Capital Strategic Partners VII.

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