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A blog about the economy and the Sacramento-area real estate market.

March 11, 2010
CalPERS' Boston project dies

A big CalPERS real estate investment in Boston has gone by the wayside, according to reports in the Boston media today.

Meanwhile, a major CalSTRS investment in New York real estate is in danger of going into default.

The CalPERS project consumed more than $120 million before developers gave up.

CalPERS' share was $91 million, according to Steve Sugerman, a spokesman for Wilson Meany Sullivan, a San Francisco development firm that was brought in last fall to evaluate the project for CalPERS.

The demise of Columbus Center, a mixed-use project to be built over the Massachusetts Turnpike in the heart of Boston, is the latest in a string of real estate failures to hit the California Public Employees' Retirement System.

The Boston project has been in trouble for years. State officials served CalPERS and its partners with a default notice a month ago, signaling the end was near.

Separately, the credit rating service Fitch Ratings issued a warning today of "imminent default" on a $400 million New York skyscraper purchased during the real estate boom by the California State Teachers' Retirement System and a New York developer.

CalSTRS and Silverstein owe $325 million on the project, according to Fitch. A CalSTRS spokesman, Ricardo Duran, wasn't immediately available for comment.

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