A joint venture between the California State Teachers’ Retirement System (CalSTRS) and the Public Officials Benefit Association (POBA) has provided a $64 million senior loan on a prime office development in Atlanta, in a new investment for the $400 million venture.
The two-building development is believed as 46,000-square-meter Atlantic Yards, one of two office projects spanning 65,000 square meters within Atlantic Station in midtown Atlanta. But it could not be confirmed immediately.
Hines, a real estate firm and Invesco Real Estate borrowed the loan to fund the construction which is scheduled for completion by the end of 2020.
They formed a JV in 2017 to develop the projects: T3 West Midtown, a heavy timber office building and Atlantic Yards.
CalSTRS and POBA drew $32 million each on the venture fund for the loan investment which is expected to generate annual returns of around 7%.
A POBA source confirmed the report.
CalSTRS and POBA launched the $400 million JV last year to invest in the US real estate market by committing $200 million each. They focused on senior loans and multi-family and retail assets.
The venture had invested $40 million in a retail asset near New York Penn Station, a railroad station; $70 million in a residential building in Texas; and $82 million in Beverly Hills property in Los Angeles.
With the venture using most of its capital, they will set up a new JV fund for new investment.
POBA, a $11 billion South Korean retirement fund for local government employees, also launched a similar JV with Teacher Retirement System of Texas (TRS) in 2018.
By Daehun Kim
<Edited by Yeonhee Kim>
(The name of the joint venture partner was corrected to California State Teachers’ Retirement System (CalSTRS) on March 19 from the California Public Employees’ Retirement System (CalPERS).)