Hines Replaces National Office LP Fund Manager
Submitted March 30, 2010, 10:53 AM
Houston–based Hines has named Gary Holtzer the new fund manager of its National Office Partners L.P. fund with the California Public Employees’ Retirement System.
Dan Rashin, who works out of the Hines office in San Francisco, was the fund’s previous manager. He held the post for four years. Rashin will be working on an un-named new project for the company, according to a Hines spokeswoman.
The fund also sold a Maryland office building earlier this year at a sizable loss compared to its purchase price. The pension fund bought the 500,000 square foot Station Square office building in Silver Spring, Md., in 2005 for $129.8 million. It ended up selling the asset for $75 million to Plymouth Meeting, Pa.,-based Urdang Capital Management.
Through the third quarter of 2009, CalPERS valued its investment in National Office Partners at $183 million. This is the last time the pension fund has presented the financial information on the partnership to its board. The investment performance for NOP through the third quarter was not strong. The total nominal returns before fees were a negative 59.1 percent for the third quarter, a negative 77.7 percent for one-year, negative 9.8 percent for five years and 0.9 percent since inception. The partnership was first established by CalPERS in July 1998.
Holtzer is a Hines vice president. He has been involved with NOP in the past. In 2005 he was a senior investment officer with NOP and was part of the fund’s team when it bought the Emeryville assets.
Rashin is now in his second stint at Hines. He worked at Hines the first time from 1985 to 1994. He rejoined the company in 2001. In between he worked for several companies including The Yarmouth Group and Lend Lease Real Estate Investments in Australia and Europe.
The CalPERS investment committee gets its next update on NOP’s performance at an April 19 investment committee meeting in Sacramento.
Senior Investment Officer for Real Estate Ted Eliopoulos is expected to introduce the agenda item, according to CalPERS staff people. Then, either Eliopoulos, or a CalPERS portfolio manager or an executive from Pension Consulting Alliance, CalPERS’ real estate consultant, is expected to walk the investment committee through the full presentation.
The discussion is to include an overview of the real estate program, including a full year review of funds’ 2009 market performance, program restructuring and priorities for real estate investing in 2010.
The pension fund has been evaluating all of its real estate managers and it is widely expected that it will end up with fewer fund managers overall, each managing larger allocations.
There has been no indication given by CalPERS that it will award a new allocation to National Office Partners this year. Clark McKinley, a public information officer in the CalPERS Office of Public Affairs, said the pension fund will be looking for good income-generating properties for possible new investments in 2010. The pension fund is shifting away from the aggressive commitments of capital to housing and land development it made in the past few years. CalPERS has allocated 10 percent of assets to real estate.
