Calpers to unload “higher-risk” housing assets, invest in commercial property instead

TRD New York /
Feb.February 15, 2011 10:19 AM

The California Public Employees’ Retirement System, the largest U.S. public pension plan otherwise known as Calpers, is shifting its strategy away from residential real estate investments after getting badly burned on several boom-era housing deals, Bloomberg News reported. Perhaps the most infamous of those deals was Stuyvesant Town and Peter Cooper Village, in which Calpers lost a $500 million stake after the complex was turned over to creditors last year. Yesterday, the pension fund’s investment committee voted to move roughly half of its real estate investments from “higher-risk” assets like housing into commercial property, in order to avoid falling victim to real estate booms and busts in the future. Unlike in residential real estate, said Tony Oliveira, vice chairman of the committee, commercial real estate downturns are “not busts, they’re adjustments.” The strategy shift will involve selling high-risk assets while buying up commercial property over the next five to seven years. Calpers, whose assets are now valued at around $228 billion, lost 11 percent of its property portfolio’s value over the past year. [Bloomberg]

Related Articles

Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

From left: Jonathan Gray and Steve Schwarzman with Stuyvesant Town

Behind Blackstone’s “capital strike”

October Issue is Live

The Real Deal‘s October issue is now available to subscribers!

Blackstone CEO Stephen Schwarzman and Stuyvesant Town (Credit: Getty Images)

Authorities will conduct review of Stuy Town deal in light of Blackstone’s vacancy strategy

Blackstone CEO Stephen Schwarzman and Stuyvesant Town (Credit: Getty Images and Wikipedia)

Blackstone “warehousing” rent-stabilized apartments at Stuy Town

The fire brigade, police and rescue services are on duty near the scene of the accident. At least one person died in a helicopter crash on a skyscraper in New York's Manhattan district (Photo by Benno Schwinghammer/picture alliance via Getty Images)

One dead in helicopter crash at
787 Seventh

(Credit from left: U.S. Air Force photo by 2nd Lt. Meredith Mulvihill, Wendel Fisher)

Stuy Town’s new “ahead of the game,” yet “strange,” marketing strategy

Brookfield partners with CalPERS and CBRE on GGP acquisition

Brookfield partners with CalPERS and CBRE on GGP acquisition