CalPERS Allocates $483MM of New Capital into West Coast Apartments

teresina-apartments-exteriorBy Jon Peterson

California Public Employees Retirement System has approved new commitments for its core West Coast apartment managers totaling $483 million. This was stated by the pension fund in a board meeting document for its investment committee meeting on September 19th.

The new commitments were $320 million to the Pacific Multifamily Investors partnership and $163 million directed to Institutional Core Multifamily Investors. These allocations were made under the pension fund’s delegated authority operation.

Pacific Multifamily Investors is a partnership with CalPERS and Palo Alto-based Pacific Urban Residential. Institutional Core Multifamily Investors has the pension fund and Invesco Real Estate involved in the partnership. Invesco did not respond to phone calls seeking comment for this story.

“We feel good about where our relationship with CalPERS is going. Being awarded another new commitment will allow us to continue to search for properties for us to buy in the future,” says Al Pace, chief executive officer for Pacific Urban Residential.

This real estate investor looks to buy vintage core apartment properties. These are assets that are of at least 10 years that offer core-like features. This would include the strong dependability of producing solid income year after year.

Pacific Urban has a couple of transactions that it will be closing on in the next 30 days that will total $100 million of capital. The manager declined to state where these assets are located. The San Francisco Bay Area is one of the company’s target markets. Other areas of interest include Southern California, Portland, Seattle and Denver.

Pacific Multifamily Investors has an existing portfolio in the partnership valued at $950 million. The partnership looks to acquire properties with cash and debt. The leverage amount on the portfolio is capped at 45 percent.

Institutional Core Investors has an existing portfolio valued at $526 million, as of March of this year. This was stated by CalPERS in a board meeting document. The partnership looks to invest in core apartment properties, and the leverage limit on the partnership is 25 percent.

The investment strategy is to buy apartments in the 10 largest apartment markets in the western region of the United States. This includes the San Francisco Bay Area, Seattle, Southern, California, Portland and Denver. Invesco has full investment discretion of the account. This means the manager can make final investment decisions without approval from the pension fund.

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