New York State Teachers Retirement System (NYSTRS) plans to commit up to $1.3bn (€1.1bn) to real estate debt in 2026, as disclosed in a board document by consultant StepStone.
The final investment amount will depend on market opportunities.
So far in 2025, NYSTRS has made no debt investments in separate accounts or commercial mortgage-backed securities investments.
In 2026, the pension fund expects to target first mortgage loans and distressed debt in office buildings with long-term credit leases in normalising markets, such as New York City.
The pension fund expects this debt strategy will offer higher yields on high-quality assets compared to their current focus on multifamily, industrial and retail.
NYSTRS expects to target direct strategies with retained discretion, as it believes fee loads for lending funds are generally excessive relative to the achievable market yields and returns.
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