CalPERS Allocates $600MM for Multifamily and Industrial Asset Investments

CBRE Global CalPERS, Bay Area, Palo Alto, Pacific Urban Residential, Pacific Multifamily Investors, San Francisco, Institutional Logistic Partners, Bentall Kennedy Global Alpha Fund Merlone Geier Partners Seattle Eastdil Secured retail real estate Bay Area

By Jon Peterson

The California Public Employees Retirement System has approved an allocation of $600 million toward multifamily and industrial assets, which will in part be focused on investments in the greater Bay Area.

In the pension fund’s board meeting document, it stated that a new $250 million equity allocation was awarded to Palo Alto-based Pacific Urban Residential for its Pacific Multifamily Investors partnership.

“This commitment, plus an additional $125 million of capital leftover, gives us a significant amount of capital to invest in the marketplace going forward,” says Al Pace, president and chief executive officer of Pacific Urban.

All of this capital will be invested by the manager in apartments in the major markets on the West Coast. One of its targeted regions is the San Francisco Bay Area. Another of its prime markets is in Southern California which includes the market of San Diego.

Pacific Multifamily Investments has an investment strategy that is called a core vintage investment program. It targeted properties that are of at least 11 years old, and the asset must be able to show durability of income. Only existing assets are considered for this strategy.

Pacific Urban manages a current portfolio for Pacific Multifamily Investors that is valued at well over $1 billion. The amount of leverage placed on the portfolio is around 30 percent.

CalPERS also plans to invest capital into industrial assets in the San Francisco Bay Area. The pension fund has approved a new $350 million allocation into the Institutional Logistic Partners partnership, as stated in a board meeting document. San Francisco will be one of its targeted markets for this capital along with other markets like Southern California and Northern New Jersey.

Bentall Kennedy is the manager of this partnership. The real estate manager declined to comment when contacted for this story.

CalPERS looks to acquire existing Class A industrial assets for Institutional Logistic Partners. These would be properties that have the ability to produce strong and predictable cash flow over a long period of time.

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