calpers

CalPERS has completed the purchase of a New York office building for $1.9 billion.

Business & Real Estate
By Dale Kasler
dkasler@sacbee.com
February 9, 2016 – 10:18 AM

  • Purchase is one of largest real estate investments in fund’s history
  • Almost fully leased, building represents conservative strategy

CalPERS has completed one of the biggest real estate investments in its history, purchasing a New York office tower for $1.9 billion.

The big pension fund confirmed Tuesday it has bought the 50-story Manhattan office building, saying the deal is emblematic of its focus in recent years on purchasing real estate properties that are already generating revenues.

The deal closed Jan. 27, said spokesman John Cline of AXA Financial, the financial services conglomerate that sold the building.

Various New York media reports put the purchase price at $1.9 billion. That represents one of the priciest real estate investments CalPERS has ever made, and one of the largest deals in New York history.

AXA and CalPERS wouldn’t comment on the price.

Despite the hefty price tag, the purchase is in line with the more conservative investment strategy adopted in recent years by the California Public Employees’ Retirement System.

In particular, the pension fund has overhauled its real estate portfolio after losing billions in the real estate crash in 2008. The pension fund is undertaking fewer speculative deals from the ground up and plowing most of its money into commercial properties that are open for business and mostly, if not completely, leased up. The New York building is reportedly 98 percent leased.

To read expanded article, click here.