POBA, CalSTRS invest $40 mn in California multifamily assets

South Korea’s pension fund Public Officials Benefit Association (POBA) and US retirement fund The California State Teachers’ Retirement System (CalSTRS) have jointly invested $40 million in multifamily assets in downtown San Jose, California, an official from POBA told The Korea Economic Daily.

The investment was made through the two investors’ $600 million joint venture for US commercial real estate loan investment, which was founded in April 2021 marking their fourth co-investment fund since 2018. Los Angeles-headquartered real estate investment firm PCCP LLC runs the fund. 

One38 Apartments, the multifamily assets, have 101 units with a 7.6% internal rate of return and as long as five years' maturity. About 97% of the apartments have been leased out, and the property is currently managed by US real estate investment firm PCCP, the POBA official said.

Targeting a 7% internal rate of return, the JV’s cumulative investment rose to $357.2 million through the San Jose multifamily housing investment. The venture had invested a total of $317.2 million in US real estate debt by October of this year, according to Korean media outlet Financial News.

POBA manages retirement savings for Korean provincial government employees. In the first half of this year, its assets under management rose by 1.5 trillion won ($1.3 billion) to 17.9 trillion won, driven by hefty gains from alternative investments.

CalSTRS is the US’ second-largest public pension fund with assets of around $329.1 billion as of end-October. The two parties formed a $312.5 million JV to expand co-investment in US multifamily properties loan in early 2020, following their two $400 million ventures launched in 2018 and 2019, respectively, for US real estate debt investment.

Write to A-Young Yoon at youngmoney@hankyung.com
Jihyun Kim edited this article.