Canada Pension Plan Invests in U.S. Real Estate

August 3, 2011 ( – The Canada Pension Plan Investment Board said it is investing $284 million in four U.S. properties, but withheld financial details on a fifth.

The Winnipeg Free Press says the Board has been targeting the U.S. apartment sector as more Americans become renters amid demographic shifts and the fallout from the U.S. housing crisis. The investments are part of the board’s real estate strategy to acquire or develop high-quality, long-term assets in core, high barrier to entry markets — high-end buildings in big cities like Los Angeles, Washington and New York.  

“We think it’s now a very attractive time to invest in the sector,” said Peter Ballon, vice-president and head of real estate investments for the Americas, according to the news report.  

The deals include a $108-million investment for a 40 per cent interest in a 426-unit property in Cambridge, Massachusetts, and a 392-unit property in the Washington, D.C., suburb of Hendon,Virginia, in a joint venture with apartment investor and operator Allianz and Archstone. In addition, Archstone and the CPPIB have formed a three-year joint venture development program.  

The board has also invested $92 million for a 45 per cent interest in the Candence multi-family development project in San Jose, California, with Essex Property Trust. Construction on the 569-unit, class A development is scheduled to begin in September. It has also taken a 44 per cent interest a 24-storey, 654-unit highrise called Sixth and Lenora in downtown Seattle for an investment $84 million in a joint venture with an entity affiliated with Multi-Employer Property Trust.  

Palazzo Westwood is a class A, 350-unit property in which the CPPIB is taking a 49 per cent stake in a joint venture with Casden Property Company LLC, a privately held real estate developer of multi-family residential properties in the western United States.  

Besides the multi-family investments, CPPIB said it also recently bought interests in three office properties in Manhattan and Washington, D.C.