The State Teachers Retirement System of Ohio (STRS Ohio) is selling a San Francisco office for $473m (€434m) after 20 years of ownership.
Beacon Capital Partners is set to acquire 44 Montgomery Street, according to sources that track office deals in San Francisco.
STRS Ohio bought the 631,255sqft office in 1997 for $111m.
The pension fund is also a tenant in the building, which serves as a regional office.
STRS Ohio is one of just a handful of pension funds in the US that buys individual properties without the aid of third-party fund managers.
Last year it was revealed that the pension fund could be expected to be a net seller in 2016 and 2017.
Beacon is expected to invest capital to renovate the property.
The investment manager manages real estate investments on behalf of a number of capital sources.
It recently raised $1.38bn for its Beacon Capital Strategic Partners VII fund.
Beacon also participates in joint ventures with pension funds. It has a venture with the California State Teachers Retirement System (CalSTRS), known as BCal.
CalSTRS recently made an additional $100m commitment to the venture, following an initial $250m commitment last year. It owns a 95% stake in BCal.
The startegy of BCal is to invest in core and value-add office buildings in major markets in the US.
When the deal on 44 Montgomery Street closes, it will join a flurry of recent office deals in San Francisco.
Brookfield Asset Management is also expected to buy One Post Street from McKesson Corporation for between $245m and $250m.
TH Real Estate recently bought the 59,868sqft 539 Bryant Street building for $46m Zurich Alternative Asset Management. The latter had bought the property in 2013 for $34.2m.
Rich Kimble, senior director and head of the Northwest region for TH Real Estate, said: “We have acquired a core asset that has the potential to offer premium-over-core returns throughout a long-term hold.
“We believe we can strategically manage tenant rollover and that the SOMA submarket, which is home to the city’s leading technology companies, will remain the epicentre for these tenants.”