Trending

In strategy shift, LA County pension fund to shed $1B of its real estate assets

Multifamily properties will make up about half the portfolio on the block

Lacera CIO Jonathan Grabel and the South Park apartment complex (Credit: LinkedIn and Realtor)
Lacera CIO Jonathan Grabel and the South Park apartment complex (Credit: LinkedIn and Realtor)

Hot on the heels of announcing its plan to spend $250 million on international investments, the Los Angeles County Employees Retirement Association wants to shed a chunk of its real estate assets on its home turf.

The pension fund has a plan to sell off as much as $1 billion in properties as it seeks to restructure its portfolio, according to the publication, Chief Investment Officer.

Out of the $1 billion in selloffs, roughly half those assets would be multifamily properties. The bulk of the sales are expected to take place over the next year, a LACERA executive told CIO.

Sign Up for the undefined Newsletter

LACERA ended 2018 with 11 percent of its total capital in real estate. It’s aiming to bring that number down to 7 percent with the dispositions.

The retirement fund has already started selling off some multifamily assets. In January, LACERA sold a mixed-use apartment building in South Park for $180 million — the county’s most expensive multifamily deal that month.

Though LACERA plans to be a net seller for the next two years, it will still invest in real estate properties that fit its criteria. Roughly four months ago, the pension fund announced a plan to invest $250 million in international real estate funds. Nearly all of LACERA’s $6.2 billion in real estate assets are in the United States.

Grabel has also asked LACERA’s board to consider allocating $500 million for new acquisitions, which could include office and retail properties. LACERA invests through separate investment managers, including Deutsche Bank affiliate DWS Group, Clarion Partners, Heitman, among others. [CIO]Natalie Hoberman

Recommended For You