Invesco, CalPERS Look for Green in the Dublin Hills

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Cole said he expected to finalize another large Bay Area acquisition in the next several weeks for the CalPERS partnership.

[contextly_sidebar id=”a88aca8ccfbbd0f363fef82880baf52d”]AvalonBay sold the Dublin property through ARA Real Estate Investment Services. ARA Principal John McCulloch, who works from the company’s San Francisco office, managed the sale. He declined comment.

AvalonBay has a large San Francisco Bay Area presence. At the end of June, it owned 5,680 units: 2,148 in San Jose; 2,268 in Oakland and the East Bay; and 1,264 in San Francisco. The entire portfolio is 96.8 percent occupied.

Invesco and the California Public Employees’ Retirement System formed their separate account, Institutional Core Multifamily Investors, in May. The pension fund awarded the real estate manager an initial allocation of $250 million with the understanding that it could become an annual allocation from the pension fund with the amount premised on how successful the manager is at finding properties to buy.

The investment strategy is to acquire existing “core,” or high quality and comparatively lower risk apartments, in the 10 largest apartment markets in the U.S. West, including the San Francisco Bay Area, Southern California, Seattle, Portland and Denver. It also includes Minneapolis.

CalPERS has capped acceptable leverage on its core assets at 25 percent including apartments that are owned by the Invesco investment partnership. The real estate manager has full discretion to make all final investment decisions.

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