(Read more on the industrial market.)
SACRAMENTO-Walton Street Capital of Chicago last month closed on its $2.8-billion acquisition of the CalWest Industrial Holdings portfolio from the California Public Employees Retirement System, an industry source close to the deal tells GlobeSt.com. CalPERS accumulated the 95-property portfolio through Chicago-based Rreef, its separate account real estate manager.
The 23.5-million-sf portfolio consists of mostly warehouse-distribution product in the Western US, with a concentration in Southern California. The portfolio also contains assets in Sacramento, Phoenix, Portland and Seattle, according to sources familiar with the portfolio. The purchase price works out to $119 per sf.
Walton Street acquired the portfolio on behalf of its commingled fund, Walton Street Real Estate Fund V. The fund attracted total equity commitments of $1.6 billion. The fund equity invested in the CalWest portfolio is believed to be on the plus side of $400 million.
The cap rate on the transaction is said to be in the 5% range, according to industry sources. "That's very low; I wouldn't be surprised if they sold off some assets," Don Fasulo, director of research for Real Capital Analytics, tells GlobeSt.com. "A few years ago, you used to get a discount for large portfolios; now you seem to pay a premium."
Eastdil Secured had the disposition assignment for CalPERS. Colliers International represented representing Walton Street. Neither brokerage firm returned phone calls seeking comment.
CalPERS and Rreef former the CalWest Industrial Holdings JV in 1998. The JV stoked its portfolio in 2000 when it acquired a portfolio from Pacific Gulf Properties for approximately $900 million. The following year, it acquired Cabot Industrial Trust and its 360 properties for $2.1 billion plus assumed debt.
CalPERS reportedly chose to liquidate the portfolio because it was not meeting its 8.5% return objective. CalPERS did not return a request for comment.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
