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CalPERS Takes Partnership Stake in Three Malls |
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CalPERS Takes Partnership Stake in Three Malls |
SACRAMENTO, CA -- (August 31, 2001) -- The California Public Employees' Retirement System (CalPERS) announced today that it has committed to invest approximately $222 million in equity in three premier shopping malls in the United States. The three shopping centers, located in California, Texas and Illinois, total nearly 4.5 million sq. ft. of retail space, including major department stores, theatres and specialty shops.
The properties are being purchased through a newly formed joint venture between CalPERS and Rodamco North America, N.V. a Dutch publicly-held property investment company operating in the United States. The joint venture will provide CalPERS with approval rights over major decisions such as budgets, leasing, and financing. CalPERS will also have change in control rights related to property management. The investments and properties include:
An estimated $69 million investment in Century City Shopping Center & Marketplace, based in the Century City area of western Los Angeles, California. The mall is approximately 800,000 sq. ft., is anchored by Bloomingdale's and Macy's, and contains 300,000 sq. ft. of specialty shops;
An estimated $65 million investment in The Houston Galleria Shopping Center, centered in western Houston, Texas. The mall is approximately 1.7 million sq. ft. and is home to Neiman Marcus, Saks Fifth Avenue, Lord & Taylor, and Macy's. The property also includes 900,000 sq. ft. of specialty shops and an ice skating rink. Rodamco is currently implementing a $25 million renovation and an expansion strategy that includes 200,000 sq. ft. of specialty shop space and the addition of Nordstrom's and Foley's;
"These malls will be a welcome addition to our real estate portfolio," said Daniel Szente, CalPERS Chief Investment Officer for CalPERS. "We will be able to capture a profitable segment of the retail market by partnering with a leading retail property investment company. These are quality properties that will offer us greater diversification in our real estate portfolio and the potential for strong returns."
CalPERS and Rodamco anticipate closing the transaction in the next 30 days. CalPERS real estate portfolio is valued at $12.4 billion as of March 31, 2001 and represents approximately 8 percent of CalPERS total fund. An estimated $9.8 billion is invested in office, retail, industrial and apartment properties. Approximately $2.6 billion is invested in housing, timber, franchise finance, and net-leased investments. Retail investments account for $2 billion.
CalPERS is the nation's largest public pension fund with assets totaling more than $156 billion. The System provides retirement and health benefits to more than 1.2 million State and local public employees and their families.
Rodamco North America N.V. is a major property investment company operating in the United States and is one of the largest property companies quoted on the Official Market of Euronext Amsterdam. As of the fiscal year ending February 28, 2001, the Company had assets totaling US$6.5 billion. The company owns interests in 36 regional shopping malls totaling approximately 40 million square feet located across the United States and a major office building in New York City. The Company's regional mall portfolio is among the most productive in the United States with sales per square foot of US$437 for the year 2000. In addition, through its affiliate, Urban Retail Properties Co., the Company is one of the nation's largest managers of retail property, managing over 65 million square feet.