CalPERS Invests $211 Million in U.S. Apartments


CalPERS has committed an additional $211 million to a partnership that invests in apartments in the Western half of the United States.

More details from IP Real Estate:

California Public Employees Retirement System (CalPERS) has made a new $211m (€186.7m) allocation to the Pacific Multifamily Investors partnership.


Pacific will buy apartment properties at least 11 years old west of the Mississippi. Core assets are typically thought to be less than 10 years old, putting the strategy outide what most funds consider core.

Pacific Urban believes that the properties it will buy still have core attributes and be able to achieve durability of income. A mixture of teachers, firemen, police officers and nurses, are typical tenants of the assets it invests in.

No more than 25% leverage will be used in the portfolio.

Acquisitions to date have been on the West Coast, from Southern California up to Seattle. The partnership can also consider Texas, Salt Lake City and Las Vegas.

The partnership now includes seven properties totaling more than 2,000 units.

CalPERS manages $296 billion in assets as of October 31, 2014.

Los Angeles Pension Invests $500 Million In Real Estate

businessman holding small model house in his hands

The Los Angeles County Employees Retirement Association (LACERA) has invested $506 million in real estate, including two apartment complexes, an office building and a distribution center.

From IPE Real Estate:

The US pension fund agreed eight separate account purchases in gateway and secondary markets.

Two of the investments, made by Clarion Partners, were in core assets and leveraged at 50%.

LACERA invested $300m in the Palazzo-Westwood apartment complex in Los Angeles, which, over 10 years, is expected to achieve a projected 8.5%. The pension fund took an interest-only, seven-year facility at a fixed 3.4% rate.

Clarion also bought the 138,000sqft Las Cimas IV office building in Austin, Texas for $43m.

LACERA is looking to hold the asset for 10 years, with a projected 8.4% net-of-fee return.

The transaction was funded by a floating rate loan at an interest rate of LIBOR plus 180 basis points.

Deutsche Asset & Wealth Management bought two properties for LACERA.

The $35m all-cash acquisition of the 525,000sqft Ingram Micro Distribution Center in Chicago is projected to achieve a net 8.95% IRR over 11 years.

LACERA expects a 8.25% return over 10 years for the North Clark apartment complex in Chicago, bought for $51.1m.

Stockbridge Capital Group bought two core assets and two non-core properties, investing $62.4m in the 208,705sqft Pinole Vista Shopping Center in Pinole, California and the Junction Business Park in San Jose, bought for $14.2m.

Pinole Vista is projected to achieve an 8.6% net IRR.

Non-core assets in San Diego and Fremont were also bought for a respective $16.4m and $13.4m, with expected net-of-fee returns of 9.25% and 9.5% over five and three year holding periods.

LACERA manages approximately $38 billion in assets.