CPP Investment Board Closes US$500 Million Real Estate Investment with TIAA-CREF Asset ManagementFebruary 27, 2007
(Toronto, ON and New York, NY) February 27, 2007: The CPP Investment Board and
TIAA-CREF Asset Management announced today that the CPP Investment Board has closed a US$500 million real estate transaction that includes a US$300 million investment in a joint venture which will invest in Class A office properties in the United States, and a US$200 million investment in a TIAA-CREF Asset Management direct real estate investment strategy. All assets will be managed by the Global Real Estate group of TIAA-CREF Asset Management.
The total commitment to the joint venture is US$612 million in equity of which TIAA-CREF will contribute 51% (US$312 million) and will provide asset management services, and the CPP Investment Board will contribute 49% (US$300 million). Including debt, the gross value of the venture is expected to reach approximately US$1.5 billion. TIAA-CREF has seeded the joint venture with two suburban Class A office properties in California, near San Francisco, and in McLean, Virginia, just outside of Washington, D.C.
Going forward, the joint venture will invest in large cap, Class A office properties with a gross value ranging from US$100 million to US$200 million. The investment focus is on strategic acquisitions of partially leased office properties in stable or recovering metropolitan areas with at least 500,000 residents.
In addition, the CPP Investment Board has made a US$200 million commitment to a
TIAA-CREF Asset Management direct real estate investment strategy which primarily focuses on institutional-quality U.S. real estate assets.
“We are pleased to partner with TIAA-CREF Asset Management which is a knowledgeable, long-term investor in the U.S. real estate market,” said Graeme Eadie, Senior Vice-President of Real Estate Investments at the CPP Investment Board. “Our investment significantly increases our exposure in the U.S. real estate market which supports our focus of diversifying the overall CPP Investment Board portfolio by product type and geography.”
“We look forward to working with the CPP Investment Board, an institution which shares our long-term investment perspective,” said Executive Vice President and Head of TIAA-CREF Asset Management, Scott C. Evans. “This partnership speaks to our commitment to building relationships with high quality institutional investors by providing investment solutions centered on our nearly 90 years of portfolio management experience.”
About the CPP Investment Board
Canada Pension Plan Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is currently investing cash flows in publicly traded stocks, private equities, real estate, inflation-linked bonds and infrastructure to balance the legacy government bond portfolio. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2006, the CPP fund totaled C$110.8 billion, including approximately C$5 billion in real estate investments. For more information, please visit www.cppib.ca.
About TIAA-CREF Asset Management
TIAA-CREF Asset Management®, a division of Teachers Advisors, Inc., provides institutional investors with access to the TIAA-CREF organization’s sophisticated investment management, research and analytical capabilities. Its investment strategies cover a wide spectrum of asset classes, from traditional equity and fixed income to real estate and other alternatives.
With more than US$405 billion in combined assets under management as of December 31, 2006, TIAA-CREF is best known as the leading provider of retirement services in the academic, research, medical and cultural fields and one of the largest institutional real estate investors in the U.S. with more than US$60 billion invested in real estate assets.
For further information contact:
Director, Media Relations
CPP Investment Board