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NYSTRS commits $100m to Starwood, Westbrook

The $88 billion pension system has agreed to invest in global real estate funds sponsored by Starwood Capital Group and Westbrook Partners as part of $200 million committed to opportunistic and value-added real estate vehicles in recent months.

The New York State Teachers’ Retirement System (NYSTRS) has committed $50 million each to Starwood Capital Group and Westbrook Partners’ latest real estate funds, Starwood Distressed Opportunity Fund IX and Westbrook Real Estate Fund IX, according to a new report on the pension’s real estate investment portfolio.

The allocations follow other recent commitments by NYSTRS to opportunistic or value-added real estate equity vehicles, including $50 million each to Federal Capital Partners’ FCP Realty Fund II and Penwood Real Estate Investment Management’s Penwood Select Industrial Partners III.

New York-based Westbrook held a first close of $180 million on its latest global value-added real estate fund in November and had raised more than $1.5 billion, or about 75 percent of its $2 billion target, as of May, PERE reported. Investors include the endowments of Harvard University and Massachusetts Institute of Technology.

Meanwhile, Starwood held a first close on its ninth global real estate fund in December, raising $1.2 billion of equity for the vehicle in just four months. The Greenwich, Connecticut-based firm is targeting between $2 billion and $3 billion in equity for the fund.

NYSTRS previously had invested in Starwood Opportunity Fund IV and Starwood Global Opportunity Fund VII, as well as Westbrook Real Estate Funds IV, V, VI and VII.

The pension system’s real estate equity portfolio comprises $5 billion in core investments; $2.1 billion in opportunistic and value-added strategies; and $2 billion in real estate investment trusts. It also holds about $5.4 billion in real estate debt, for a total of approximately $16 billion in real estate assets, according to the NYSTRS report.