| The California State Teachers' Retirement | | | | around the country that are valued at $550 million. |
| System (CSTRS) is the second largest public | | | | Like OPERF's fund, the California schools |
| pension fund in the nation, providing retirement, | | | | educators' fund, known as the Cash Flow Office |
| disability and survivor benefits to California schools | | | | Two, will target high occupancy office buildings in |
| educators. Over 776,000 kindergarten through | | | | permanent locations across the United States. |
| community college educators are members of the | | | | CSTRS has committed $100 million to the fund, |
| CSTRS, which currently has an investment | | | | which can grow to over $500 million over time. |
| portfolio of $142 billion. | | | | Lionstone contributes one percent of the fund's |
| Keeping quality educators in the California schools | | | | total equity. With the combined equity added to |
| is of primary concern to everyone in the state. | | | | debt of up to 50 percent loan-to-value (LTV), the |
| Without well-educated California schools youth, the | | | | total buying power of the fund is approximately |
| city, businesses and economy of the state will | | | | $1 billion. |
| suffer. Thus, when Lionstone Group, a | | | | The Lionstone Group was formed in 2001. It |
| research-based real estate investment firm, | | | | creates national investment strategies using |
| announced last month they and CSTRS had | | | | primary research. Dedicated teams execute each |
| formed a discretionary $100 million real estate | | | | investment strategy, including the fund for the |
| investment fund, the news was well received by | | | | California schools educators. Before creating the |
| everyone. As with any organization, good benefits | | | | fund with the California schools educators' |
| will attract and keep quality educators in the | | | | retirement system, Lionstone refined their |
| California schools. | | | | investment process to target locations that |
| What makes the announcement so exciting is | | | | produce buildings with lower risk factors, according |
| Lionstone's track record with another fund it | | | | to Lionstone Principal Dan Dubrowski. |
| created with the Oregon Public Employees | | | | The California schools CSTRS Portfolio Manager |
| Retirement Fund (OPERF). Called the Cash Flow | | | | Michael Thompson stated that the Lionstone |
| Office One, the fund has consistently exceeded | | | | management team over the Cash Flow Office |
| expectations since its inception in December 2002. | | | | Two fund is very entrepreneurial. He added that |
| At that time, OPERF committed $75 million to the | | | | their skill set will enable CSTRS to continue to |
| fund, expecting Lionstone to invest the capital | | | | grow their core real estate portfolio. |
| within 24 months. Lionstone invested over 80 | | | | This news gives all California schools educators |
| percent of OPERF's capital within 12 months with | | | | hope for a better future, knowing they have an |
| excellent returns. OPERF expanded its funding | | | | excellent resource during their tenure with the |
| commitment in 2004 and now has over $200 | | | | California schools and in retirement. |
| million of equity and owns 20 office buildings | | | | |