CalSTRS Hires Principal as First REIT Manager

05/20/2019 | by

Multiple media outlets have reported that the California State Teachers Retirement System (CalSTRS), a $229 billion pension fund, has awarded a $100 million account to Principal Real Estate Investors as its first REIT manager. CalSTRS said the REIT portfolio is “part of the real estate industry in which CalSTRS had not yet invested in.”

At the end of last year, the pension fund’s real estate portfolio stood at $31.4 billion. CalSTRS has set the maximum equity investment for public real estate within the real estate portfolio at 15%. The REIT allocation will be benchmarked to a FTSE Nareit index.

(Contact: Meredith Despins at mdespins@nareit.com)

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What's a REIT?

REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.

Why Invest in REITs

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. These are the characteristics of real estate investment.

About Nareit

Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses.