CalPERS Eyes $6.3B in RE Investments

SACRAMENTO—The California Public Employees' Retirement System plans to commit $6.3 billion during the new fiscal year to real estate funds and joint ventures. The nation's largest pension plan at $301 billion currently has real estate investments worth approximately $27 billion, according to CalPERS data.

Citing documents from its investment committee meeting, PERE reported Tuesday that CalPERS will allocate its real estate spend among a dozen existing managers. Among the largest allocations planned for fiscal 2015-2016 is $1.67 billion to Fifth Street Properties, a partnership with Los Angeles-based CommonWealth Partners targeting core, core-plus and value-added acquisitions and development in large-scale office and mixed-use properties across the US. CommonWealth also is the real estate manager for National Office Partners, an office-focused JV with CalPERS that is slated to receive an additional $101 million, PERE reported.

A co-investment JV with GID Investment Funds, Institutional Multifamily Partners, is expected to be granted $992 million during FY '15-'16. CalPERS also plans to apportion $750 million to Institutional Mall Investors, a core-oriented, co-investment venture with Miller Capital Advisory that focuses on market-dominant regional and super-regional US shopping centers. Other real estate managers for which CalPERS plans allocations during the fiscal year include Bentall Kennedy, GI Partners, ARA Asset Management and Pacific Urban Residential.

This past June, GlobeSt.com reported that CalPERS planned to sell as much as $3 billion of its real estate investment holdings. The pension fund hired Park Hill Group to assist in the deal, which would be the largest offering ever on the real estate secondaries market.