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CalSTRS buys $800m real estate assets from Lehman Brothers

25 May 2012

The California State Teachers’ Retirement System (CalSTRS), the largest teachers’ pension fund in the US, has bought a basket of East Coast real estate assets from bankrupt investment bank Lehman Brothers Holdings.

The firm bought a controlling stake in real estate investment, management and development company LCOR in a deal that values the assets at more than $800m.

The company manages more than 7,400 multifamily units, 7.7 million square feet of commercial space, and a development pipeline of mixed use real estate through its real estate operating and development businesses.

Among the assets included in the transaction are 308 apartment units at 25 Broad Street in Lower Manhattan, New York, 462 units in Greenwich, Connecticut, as well as assets in Aventura, Florida and Tysons Corner, Virginia.

CalSTRS anticipates expanding the LCOR relationship with additional investments in future development and redevelopment of multifamily and commercial real estate assets, broadening its real estate holdings in the Washington, DC to New York City corridor, it said.

Morgan Stanley acted as the exclusive financial advisor to LCOR and Lehman in the transaction.

CalSTRS was advised by Principal Real Estate Investors and GI Partners, a Menlo Park-based private equity firm that will act as ongoing asset manager for CalSTRS’ interests in the platform and also co-invested in the deal.

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