California leavin’: CalPERS cutting RE investment by 50%

“It’s much tighter and a more competitive situation.”

New York /
Sep.September 15, 2017 06:23 PM

The country’s largest pension system is cutting its real estate investments in another warning sign for the New York commercial property market.

The California Public Employees’ Retirement System plans to invest $3.95 billion in real estate in the current fiscal year, which began on July 1. That’s down from $4.6 billion last year and $7.9 billion the year before — a decline of 50 percent in two years, PERE reported.

And CalPERS isn’t alone. Overall pension fund investment in real estate fell to $15.4 billion in the first half of the year, down from $21.9 billion a year earlier, according to FPL Advisory Group.

“Four or five years ago, if we gave [managers] $500 million, 50 percent would be put to work. This year, it’s looking more like 25-30 percent. Prices are moving up,” CalPERS’ managing investment director of real estate Paul Mouchakkaa said in April. “What does that mean for us? It’s much tighter and a more competitive situation.”

CalPERS managed $30.5 billion in real estate as of June 30. Last year it bought the Midtown office tower at 787 Seventh Avenue for $1.9 billion, one of the largest investment sales deals of 2016. [PERE] — Konrad Putzier


Related Articles

arrow_forward_ios
Photos courtesy of HAP Investments
HAP Investments unveils new plans for Journal Square high-rise
HAP Investments unveils new plans for Journal Square high-rise
Photo Illustration of BioMed Realty CEO Tim Schoen and Alexandria Real Estate Equities CEO Joel S Marcus. (Getty, BioMed)
Life sciences boom continues with 36M sf in works
Life sciences boom continues with 36M sf in works
From left: Flex’s Shragie Lichtenstein; Piñata’s Lily Liu; NestEgg’s Eachan Fletcher; and Till’s David Sullivan
These startups want to guarantee your rent
These startups want to guarantee your rent
Clockwise from top left: Seattle, Boston and New York City (Photo Illustration by Kevin Rebong for The Real Deal)
Real estate prices fell more in Manhattan than anywhere else in 2020
Real estate prices fell more in Manhattan than anywhere else in 2020
What last year’s biggest real estate lawsuits mean for 2021
What last year’s biggest real estate lawsuits mean for 2021
What last year’s biggest real estate lawsuits mean for 2021
Related’s Stephen Ross and 265-275 Cherry Street (Google Maps; Getty)
NYC investment sales showed signs of recovery at end of 2020
NYC investment sales showed signs of recovery at end of 2020
Tishman Speyer CEO  Rob Speyer and The Spiral as seen on January 21, 2021 (Photos via Getty Images; Illustration by Kevin Rebong)
Tishman Speyer’s half-empty Hudson Yards tower tops out
Tishman Speyer’s half-empty Hudson Yards tower tops out
Tishman Speyer CEO Rob Speyer and Latch CEO Luke Schoenfelder (Getty; Latch)
Latch to go public via Tishman Speyer’s SPAC
Latch to go public via Tishman Speyer’s SPAC
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...