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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.

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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