Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(Read more on the industrial market.)

SACRAMENTO-Walton Street Capital of Chicago last month closed on its $2.8-billion acquisition of the CalWest Industrial Holdings portfolio from the California Public Employees Retirement System, an industry source close to the deal tells GlobeSt.com. CalPERS accumulated the 95-property portfolio through Chicago-based Rreef, its separate account real estate manager.

The 23.5-million-sf portfolio consists of mostly warehouse-distribution product in the Western US, with a concentration in Southern California. The portfolio also contains assets in Sacramento, Phoenix, Portland and Seattle, according to sources familiar with the portfolio. The purchase price works out to $119 per sf.

Walton Street acquired the portfolio on behalf of its commingled fund, Walton Street Real Estate Fund V. The fund attracted total equity commitments of $1.6 billion. The fund equity invested in the CalWest portfolio is believed to be on the plus side of $400 million.

The cap rate on the transaction is said to be in the 5% range, according to industry sources. “That’s very low; I wouldn’t be surprised if they sold off some assets,” Don Fasulo, director of research for Real Capital Analytics, tells GlobeSt.com. “A few years ago, you used to get a discount for large portfolios; now you seem to pay a premium.”

Eastdil Secured had the disposition assignment for CalPERS. Colliers International represented representing Walton Street. Neither brokerage firm returned phone calls seeking comment.

CalPERS and Rreef former the CalWest Industrial Holdings JV in 1998. The JV stoked its portfolio in 2000 when it acquired a portfolio from Pacific Gulf Properties for approximately $900 million. The following year, it acquired Cabot Industrial Trust and its 360 properties for $2.1 billion plus assumed debt.

CalPERS reportedly chose to liquidate the portfolio because it was not meeting its 8.5% return objective. CalPERS did not return a request for comment.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.