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Massachusetts PRIM Board Invests Big In Santa Clara Land Deal

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The Massachusetts Pension Reserves Investment Management Board ended last year with a $112.3M investment in Santa Clara. PRIM and the Santa Clara Redevelopment Authority closed a deal last month for 21 acres and the related ground lease at 5451-5455 Great American Parkway. This marks PRIM’s first direct investment in real estate. The investment is expected to produce millions of dollars in long-term investment fee savings.

“By purchasing and owning this land directly rather than through an investment manager, PRIM stands to save approximately $11M in investment-management fees over the next 20 years,” PRIM executive director and CIO Michael G. Trotsky said. “This is precisely the sort of innovation and efficiency we have been aggressively seeking across the PRIT Fund portfolio and will continue to pursue.”

Under PRIM’s five-year-old Project SAVE program, it has reduced fees and costs by an annualized $146M.

The site contains three Class-A five-story office buildings totaling 449k SF. The buildings are leased to high-tech companies, including Dell and Arista, by a separate firm owning the buildings. As of Dec. 21, the firm is leasing the land from PRIM under a contract extending 64 years through 2081.

DivcoWest brought the potential transaction to PRIM’s attention and advised it on the purchase.

The PRIM team involved in the transaction included director of real estate and timberland Timothy Schlitzer; senior investment officer for real estate and timberland John LaCara; investment officer Christina Marcarelli; director of operations Matthew Liposky; manager of real estate and timberland reporting George Tsipakis; and deputy executive director and general counsel Christopher J. Supple.