Real estate deal could cost CalPERS $500 million

CalPERS stands to lose $500 million on a New York real estate deal.

The likely loss, first reported in today's Wall Street Journal, marks the latest setback for the real estate portfolio at the California Public Employees' Retirement System. The portfolio stood at $17.87 billion as of July 31 and had lost 36 percent of its value in the previous 12 months.

CalPERS spokesman Clark McKinley confirmed that CalPERS invested $500 million in late 2006 into a Manhattan apartment complex called Peter Cooper Village and Stuyvesant Town. According to the Journal, the project is about to go into default and the owners are unwilling to invest further.

McKinley confirmed that CalPERS is "not putting any more money in at this time."

Source Sac Bee