Between a high-end shopping mall in Moscow and a record-setting
property deal in Los Angeles, CalPERS is spending heavily on real estate again.
Behind the glamour, however, the latest purchases reflect newfound conservatism by the California Public Employees' Retirement System.
CalPERS and a partner agreed this week to spend $550 million on a trio of Southern California office buildings.
One of the buildings, a downtown Los Angeles tower that specializes in telecommunications and data-management tenants, sold for $437.5 million, according to the Los Angeles Times. That worked out to $660 per square foot, a record for downtown L.A., the paper said.
The other two buildings are in El Segundo.
The three buildings were purchased by a partnership between CalPERS and GI Partners, an investment firm in Menlo Park. The two teamed up a year ago to invest in tech-oriented real estate.
Separately, CalPERS and Hines, a Houston real estate firm, teamed up last week to buy a stake in the Metropolis Shopping and Entertainment Mall, a 2.2-million-square-foot upscale shopping center in Moscow. The seller was an affiliate of Morgan Stanley.
Terms of the deal weren't disclosed.
What the Moscow and Los Angeles purchases have in common: After getting burned during the market crash, CalPERS is sticking to its recent strategy of avoiding speculative, works-in-progress real estate deals.
Instead, the pension fund is focusing on stable, leased-up properties, including those in developing countries like Russia.
The Moscow purchase "is part of the implementation of our 2011 strategic plan, which outlines our intent to buy stabilized assets in major cities in emerging market countries," said Ted Eliopoulos, CalPERS' senior investment officer for real estate, in a prepared statement.
According to Hines, the mall is "fully leased and has a waiting list for retailers wanting to rent space."
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