Canada pension manager invests in U.S. real estate

Real estate news By U.S. dollars unless noted
Tue Feb 27, 2007 3:01PM EST

VANCOUVER, British Columbia , Feb 27 (Reuters) - The CPP Investment Board, one of Canada's biggest pension fund managers, will invest $500 million in the U.S. real estate market in a deal with New York-based money manager TIAA-CREF, the two firms said on Tuesday.

CPP, which invests the funds not needed by the Canada Pension Plan to pay benefits to members, has earmarked $300 million for a joint venture with TIAA-CREF to invest in top-notch office properties in the United States. TIAA-CREF invests billions of dollars for universities and nonprofits groups. The U.S. money manger will contribute $312 million to the joint venture, giving it a 51 percent stake, and will also provide asset management services.

Including debt, the gross value of the venture is expected to reach about $1.5 billion. The venture plans to invest in partially-leased office properties valued between $100 million and $200 million in stable or recovering metropolitan areas.

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