CalPERS Ups Urban Retail Investment by $50 Million; Fund Takes Ownership Interest in Nation's Leading Minority-Owned Real Estate Investment Firm.

SACRAMENTO, Calif.--(BUSINESS WIRE)--Dec. 16, 1999--

The California Public Employees' Retirement System (CalPERS) has approved an additional $50 million investment to bring quality retail developments to underserved urban markets within California's major metropolitan areas.

The additional funds are targeted to be invested by California Urban Investment Partners (CUIP) -- a joint venture between CalPERS and Johnson/MacFarlane Urban Partners. In 1996, CalPERS joined forces with former Los Angeles Lakers star Earvin "Magic" Johnson, Jr. and real estate advisor Victor B. MacFarlane to make real estate investments in California's urban areas.

The decision by the CalPERS Board raises the pension fund's stake in the joint venture to more than $100 million.

Under the funding agreement, CalPERS will also be given a 10 percent equity ownership position in MacFarlane Urban Retail Company, one of the leading minority-owned real estate investment firms in the nation. The pension fund will be granted first right to act as the primary investor in all new MacFarlane urban business opportunities.

"This is a tremendous opportunity for CalPERS," said William D. Crist, President of CalPERS Board of Administration. "This joint venture has set a track record of good returns for CalPERS, while also providing needed retail products and services to those who live in California urban communities."

Thus far, the joint venture has invested in two existing shopping centers and is committed to a third.

In February 1997, CUIP invested in Margarita Plaza, a 77,000-square foot retail center located in the Huntington Park area of Los Angeles. Since the acquisition, both management and operations of the property have been upgraded, enhancing the appeal for patrons and potential tenants.

Later that year, the partnership made an investment in Ladera Shopping Center located in the Ladera Heights area of Los Angeles.

Currently, CUIP is committed to the development of the retail component of the Hollywest Promenade in Los Angeles and is in negotiations to purchase a portfolio of other California urban retail properties.

"These additional funds will result in jobs in the California construction, retail-trade and service industries," said Charles P. Valdes, Chairman of CalPERS Investment Committee.

Research performed for CalPERS shows, for example, that major grocery retailers have opened stores in long neglected urban city neighborhoods in California and have realized more sales and profits than their suburban counterparts.

CalPERS is the nation's largest public pension fund with assets totaling more than $165 billion. The System provides retirement and health benefits to more than 1 million state and local public employees and their families. For further information on CalPERS, please visit the System's Web site at www.calpers.ca.gov.