- CalPERS committed $800M to real estate in Q1 2026, directing both investments to vehicles managed by Ares Management.
- Ares US Real Estate Fund XI received $450M, while its affiliated co-investment vehicle received another $350M.
- CalPERS reported $55B in real estate assets at year-end 2025 against a 10% target allocation to the asset class.
Institutional Real Estate, Inc. reports that CalPERS made $800M of Q1 2026 real estate commitments through two Ares Management vehicles. The California pension system allocated $450M to Ares US Real Estate Fund XI and $350M to the affiliated Ares US Real Estate Fund XI Co-Invest.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
The Details
Ares US Real Estate Fund XI is a closed-end, value-add strategy with a $3.1B fundraising goal. The fund targets US growth markets with diversified economies, established transportation networks and long-term growth potential. CalPERS paired its $450M fund commitment with a separate $350M commitment to the co-investment vehicle. Together, the two Ares vehicles account for the full $800M of real estate commitments disclosed for the quarter. Both commitments were disclosed for Q1 2026. The pension fund therefore placed its new real estate capital with one manager.
Why It Matters
CalPERS had $627.7B in total assets under management as of March 31. Its real estate portfolio totaled $55B as of Dec. 31, 2025, with a 10% allocation target for the asset class. The quarter’s real estate commitments sit within a public pension portfolio with $627.7B in total assets as of March 31. The structure gives CalPERS exposure to a commingled value-add fund. It also adds an affiliated co-investment vehicle under the same manager. The $55B real estate figure provides the portfolio context for the new allocations. CalPERS also maintained a 10% real estate allocation target.
What’s Next
Ares US Real Estate Fund XI is still working toward its $3.1B fundraising target. Its mandate centers on growth markets with diversified economies and transportation infrastructure. Future deployment will follow that stated investment profile. For CalPERS, the commitments add to a large existing real estate portfolio. The pension fund had a 10% allocation target at year-end 2025.
