CalPERS Allocates $1.75B of New Capital to Bay Area-Based Real Estate Managers

GI Partners, Bay Area, GI Real Estate Essential Tech + Science Fund, Hayward, Redwood City, Santa Clara

By Jon Peterson

Looking to expand its allocation of investment funds across a number of real estate asset classes, California Public Employees Retirement System (CalPERS) has approved new commitments with real estate managers based in the San Francisco Bay Area totaling $1.75 billion, according to information provided by the pension fund.

San Francisco-based GI Partners has been allocated a total of $1.1 billion of new commitments. This was $700 million for the CalEast Partnership and $400 million for the TechCore relationship. The manager did not respond to an email seeking comment for this story, but the company did announce earlier this week that it had closed of its inaugural Data Infrastructure Fund, which totaled $1.8 billion in commitments from a broad group of investors. That fund will invest across four data infrastructure sub-sectors data centers, data transport, wireless access and tech-enabled infrastructure, primarily in North America

Along with GI Partners, Palo Alto-based Pacific Urban Residential also received new commitments from CalPERS totaling $650 million for its Pacific Multifamily Investors partnership. The company has been actively investing across the region and beyond, and just this year invested in two Bay Area assets, totaling over $300 million. In January, Pacific Urban spent $194 million, or an even $485,000 per unit, for the Sofi Waterford Park complex in San Jose. In May, the company purchased the 138-unit Skyline Terrace Apartments in Burlingame for $108 million, or around $782,608 per unit.

The manager did not respond to an email for this story.

CalEast is a core industrial investment entity. It looks to acquire well-leased industrial assets in the eastern portion of the country. This partnership has a market value of $4.2 billion through the end of 2019, according to information from CalPERS. This portfolio has produced a 14.5 percent net return during 2019 and a 14.7 net return over the last three years.

TechCore invests in technology-oriented real estate, which includes assets like data centers, carrier hotels, corporate campuses for technology companies and life science properties. It looks for properties on a nationwide basis. CalPERS has set a market value on this relationship of $1.4 billion. Its net returns over the past five years have varied from 8.5 percent for one year to 12.4 percent for five years.

Finally, Pacific Multifamily Investors has an apartment only investment strategy, and it invests in core vintage assets only. There is a requirement that all properties in the partnership need to be at least 11 years old. The vast majority of assets in the relationship are located on the West Coast, which includes the San Francisco Bay Area. The net returns for the partnership have been 7.5 percent for one year, 10 percent for three years and 10.7 percent five years.

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