CalPERS is betting big on Las Vegas real estate, purchasing a glitzy retail and nightlife complex on the Strip where entertainers such as Britney Spears and Jennifer Lopez regularly perform.
California’s giant public pension fund recently bought Las Vegas’ high-profile Miracle Mile Shops for a reported $1.1 billion. It’s one of the largest real estate deals CalPERS has made since the property bubble burst nearly a decade ago.
CalPERS purchased the 200-store mall, next to Planet Hollywood Resort & Casino, through a company called Institutional Mall Investors LLC. Institutional Mall, which owns 21 shopping centers, is a partnership between the California Public Employees’ Retirement System and Chicago-area real estate firm Miller Capital Advisory Inc.
The sellers, a partnership based in New York, announced the completion of the deal last week. Financial terms weren’t released, and CalPERS declined to comment. But the Las Vegas Review-Journal, quoting anonymous sources, said the deal was worth just under $1.1 billion.
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While the purchase sounds splashy – the mall is anchored by a theater where entertainers perform – it’s actually in line with a more conservative approach CalPERS has taken to real estate investing in the years following the market crash.
After losing about $11 billion in real estate during the crash, CalPERS has largely moved away from speculative property deals and is putting more of its money into existing, leased-up shopping centers and office buildings. Earlier this year, for instance, the pension fund made one of the largest real estate investments in its history, spending a reported $1.9 billion on a New York office tower.
CalPERS’ real estate portfolio was worth $27.3 billion as of July 31. Its total portfolio is worth $302.35 billion.