Los Angeles Pension Fund Closes on $90MM worth of Deals through Stockbridge

Bell Partners, Northern California, Bay Area, Bell Institutional Fund VI, Pennsylvania Public School Employees’ Retirement System

By Jon Peterson

The Los Angeles County Employees Retirement Association has closed on three acquisitions totaling $90 million in the San Francisco Bay Area with San Francisco-based Stockbridge Capital Group, according to a board meeting document from the pension fund. The properties are the Pinole Vista Shopping Center in Pinole, the Junction Business Park in San Jose and the Warm Springs Business Center in Fremont.

Marin County Employees’ Retirement Association, San Francisco real estate, Bay Area real estate, Woodmont Realty Advisors, AEW Capital ManagementLACERA paid $62.4 million or $299 per square foot to buy the 208,705 square foot Pinole Vista property. The pension fund stated in a board meeting document that Stockbridge projects the property will achieve an 8.6 percent net IRR. The investor has placed this asset in the core sector of tis real estate portfolio.

The retail center was acquired with a mixture of debt and equity. The property has a $31 million loan that has a 10-year term with five years of interest-only payments at a fixed rate of 4.2 percent.

Pinole Vista is a neighborhood shopping center located at 1918 Fitzgerald Drive in Pinole. Its two main anchors are Albertson’s and Kmart. The property was developed in 1981, and within three miles of the property, there is a population base of 100,000 residents.

LACERA bought the Junction Business Park in San Jose for $14.2 million. This was an all-cash transaction.  This property is projected to achieve an 8 percent net-of-fee return over a 10-year holding period, according to a pension fund document.

The property is a multi-tenant industrial property, which the pension fund considers to be a core property.

LACERA has paid $13.4 million or $91 per square foot to buy the 146,592 square foot Warm Springs Center in Fremont located at 48501-48531 Warm Springs Road.

The pension fund paid all-cash for the asset. The anticipated yield on the deal is a 9.5 percent net-of-fee return over an assumed three-year holding period.

LACERA has placed this property in the high-return sector of its real estate portfolio. The property is now around 25 percent vacant. The property was first constructed in 1990 and is considered to be an R&D facility.

The three acquisitions by the pension fund and Stockbridge were accomplished through their separate account relationship.

These deals were part of $505.6 million worth of deals that LACERA has acquired over the past two quarters with several of its separate account managers. The other deals were apartments in Los Angeles and Chicago, office building in Austin and an industrial property in Illinois.

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