RREEF Founder Scion Awarded $30MM CalPERS Allocation

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By Jon Peterson

San Francisco-based Sack Properties has received a $30 million equity allocation from a CalPERS program created to help groom the next generation of real estate managers.

San Francisco Bay Area real estateCombined with debt, the money is expected to give Sack the capacity to invest $60 million to $100 million in San Francisco Bay Area apartments in a joint venture with the Canyon Catalyst Fund.

The California Public Employees’ Retirement System allocated $200 million in equity for the initial funding of the Canyon fund, which is being managed by Los Angeles-based Canyon Capital Realty Advisors. The investment plan is to hire the next generation of real estate managers.

Sack Properties is the second Northern California manager to be selected by Canyon; the first was San Francisco-based Rubicon Point Partners.

“Not only will the capital allow us to be more active in the marketplace, we also will be mentored by Canyon to better understand the ins and outs of working with institutional capital in the marketplace,” said Kirby Sack, president and chief executive of Sack Properties.

The $30 million from the Catalyst fund is initial capital with an opportunity to grow to a total of $50 million in the future, she said. “Our company will be putting in $7 million to $10 million of our own.”

Prior to setting up the venture with Canyon, Sack Properties raised investment capital from friends, family and small institutional investors. The company currently owns a portfolio of 12 Bay Area properties with 1,290 apartments collectively valued at around $300 million. They include two properties each in San Jose and Lafayette and single properties in Santa Rosa, Novato, Mountain View, Petaluma, Sunnyvale, Corde Madera, Rohnert Park and San Mateo. The portfolio varies in size from 32 units to 226.

“Our strategy is to buy older existing apartments that have a value-add investment play,” she said.

The company plans to stay in the Bay Area and has one property under contract to close in August or September. “There is another deal that we have a letter of intent on,” she said.

The company was formed in 1958 and led by Kirby’s father, Paul Sack. Paul Sack founded The RREEF Funds, now known as Deutsche Asset & Wealth Management. This company now manages a real estate portfolio for major institutional investors valued at $60 billion on a worldwide basis. Paul Sack works in an advisory capacity to Sack Properties.

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