Teacher Retirement System of Texas is investing $200m (€160m) in car dealership specialist Capital Automotive, which was acquired by Brookfield Property Partners last month.
The pension fund is investing in the $651m BSREP CARS Co-Invest Pooling, a vehicle set up by Brookfield to invest in Capital Automotive, which provides real estate financing for car dealerships.
The commitment by Texas Teachers was one of several from institutional investors and will amount to 30.5% of invested capital in the vehicle.
Brookfield Strategic Real Estate Partners Fund provided most of the capital for the joint venture. Brookfield declined to comment on how much capital it has invested. Additional capital came from BSREP CARS.
Capital Automotive, which has invested $4.3bn in 440 US facilities and has a 16.3m sqft portfolio in 35 US states, typically provides real estate financing for automotive dealers to either acquire new locations or upgrade existing operations. The firm was previously owned by DRA Advisors.
Texas Teachers made the investment for its ‘special situations’ portfolio, a new category it created within its real assets portfolio for investments outside traditional core, value-added and opportunistic classifications.
Brookfield raised $4.4bn for its Strategic Real Estate Partners Fund, completed in summer 2013. Both Texas Teachers and the Pennsylvania Public School Employees’ Retirement System made $200m commitments to the opportunistic fund.
The fund can buy individual properties or entire real estate companies in both the US and Western Europe.
Brookfield, meanwhile, will come to market with its Strategic Real Estate Partners Fund II next year.