Retirement System of the State of California teachers (CSTR) is the second largest public pension fund in the nation, providing retirement, disability and survivor educators California. More than 776,000 educators from kindergarten through community college are members of the CSTR, which now has a portfolio of $ 142 billion investment.
Keeping quality educators in the school system in California is the main concern of everyone in the state. Without well-educated California youth, cities, businesses and the state economy will suffer. So when Lionstone Group, a real estate investment based research firm announced last month they had formed CSTR and $ 100 million real estate investment discretionary funds, the news was well received by all. As in any organization, good benefits to attract and retain quality educators in California.
What makes the announcement so exciting is Lionstone history with another fund it created with the Pension Fund of the Oregon Public Employees (OPERF). Called the Cash Flow Office One, the fund has consistently exceeded expectations since its creation in December 2002. At that time, OPERF committed $ 75 million to the fund, pending Lionstone to invest the capital in 24 months. Lionstone invested over 80 percent of OPERF capital within 12 months with excellent returns. OPERF expanded its funding commitment in 2004 and now has more than $ 200 million of equity and owns 20 office buildings around the country that are valued at $ 550 million.
As OPERF funds, fund school teachers in California, known as the Cash Flow Office Two, will focus on high occupancy office buildings in permanent locations in the United States.
CSTR has committed $ 100 million in the fund, which can reach more than $ 500 million over time. Lionstone contributes one percent of the total capital of the fund. With the combined equity added to debt of up to 50 percent loan to value (LTV), the total purchasing power of the fund is approximately $ 1 billion.
The Lionstone Group was formed in 2001, the national investment strategies is created by primary research. Dedicated teams execute each investment strategy, including the background of school educators in California. Before creating the fund with pension system for educators, Lionstone refined their investment process in locations that produce buildings with lower risk factors objective, according to Lionstone Principal Dan Dubrowski.
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