CalPERS Completes Near-Historic Real Estate Deal For NYC Office Tower

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CalPERS on Tuesday said it had completed one of the largest real estate deals in its history: the $1.9 billion purchase of a 50-story Manhattan office tower.

CalPERS did not confirm the price tag; but if the $1.9 billion figure is correct, it would also rank among the largest real estate deals in New York City history.

Details from the Sacramento Bee:

The deal closed Jan. 27, said spokesman John Cline of AXA Financial, the financial services conglomerate that sold the building.

[…]

AXA and CalPERS wouldn’t comment on the price.

Despite the hefty price tag, the purchase is in line with the more conservative investment strategy adopted in recent years by the California Public Employees’ Retirement System.

In particular, the pension fund has overhauled its real estate portfolio after losing billions in the real estate crash in 2008. The pension fund is undertaking fewer speculative deals from the ground up and plowing most of its money into commercial properties that are open for business and mostly if not completely leased up. The New York building is reportedly 98 percent leased.

“The acquisition follows our real estate strategic plan to invest in core, income generating properties,” said CalPERS spokesman Joe DeAnda in an email. The pension fund made the purchase with one of its outside real estate partners, CommonWealth Partners of Los Angeles.

The deal amounts to 7 percent of CalPERS’ real estate portfolio.

CalPERS manages a portfolio of approximately $275 billion.

 

Photo by Thomas Hawk via Flickr CC License

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