Outside Opinions While the California State Teachers’ Retirement System (CalSTRS) in Sacramento, Calif., strives to perfect its joint-venture system and increase its flexibility and responsiveness, many of its partners already like the latitude they get. “We have much more flexibility [in our relationship with CalSTRS] as to how we can invest the capital since we are really in a partnership,” says Fred Lieblich, president of SSR Realty Advisors.
The pension fund’s ability to let its partners act autonomously is only one thing that makes it attractive to multifamily developers and operators. Its versatility is another. “Because of CalSTRS’ size, they are able to do a lot of different things,” says David Schwartz, managing member of Waterton Associates. “They are big enough to do core, value-added, student, and affordable housing. They are not just stuck with core [class A apartments].”
So, while CalSTRS’ joint venture system – just two years old – is not where portfolio manager Jim Hurley may want it to be, it’s developing a track record. “They are already an enormous source of capital,” says Jerry Brand, senior vice president at Fairfield Residential. “If we generate the proper returns, I think there is a great potential to go back to them for more capital.”
CalSTRS at a Glance
- Year founded: 1913
- Location: Sacramento, Calif.
- 2003 Revenue: $156 million
- Number of Units in the Pipeline: 2,049
- Expected Units Added within Three Years: 8,000
- Geographic Coverage: Nationwide
- Revenue Streams: Contributions of various school systems to the pension fund and returns from investments.
- Number of Employees: One person devoted to multifamily. Seven devoted to real estate.
