CPP Investment Board moves into U.S. medical real estate sector in California

TORONTO – Canada Pension Plan Investment Board and Health Care REIT Inc. (NYSE:HCN) are jointly investing in a portfolio of California medical office buildings worth a total of US$449 million.

The pension fund manager and real estate company will own a 50.5 per cent interest in the property portfolio through a joint venture, which will be owned 45 per cent by the CPP Investment Board and 55 per cent by Health Care REIT.

The CPPIB didn’t disclose other financial details of the transaction, but the published information suggests the retirement fund manager’s share of the portfolio is valued at about US$102 million.

There are eight medical office buildings in the Los Angeles and San Diego areas in the portfolio, which marks the Canadian retirement fund manager’s entry into the health-care segment of the U.S. real estate sector.

The CPP Investment Board oversees about $264.6 billion of assets on behalf of the Canada Pension Plan, which is funded by employee and employer contributions.

The CPPIB invests surpluses that will eventually be used to supplement retirement payments for about 18 million contributors and beneficiaries