GM Plan Seeks to Unload Woodfield Mall, CalPERS Interested

The pension plan of General Motors Co. is currently in the process of divesting large swaths of real assets including private equity interests and properties. The US$ 94 billion plan is shedding illiquid assets as it transferred certain salaried retiree benefit obligations in the approximate amount of US$ 26 billion to the Prudential Insurance Company of America. In return, General Motors will purchase a group annuity contract from Prudential.

The California Public Employees’ Retirement System (CalPERS) owns 50% of Woodfield Mall, which based in Schaumburg, Illinois, is a joint-venture property investment with the General Motors’ plan. Part of the joint venture agreement enables CalPERS the right to have the first glance at buying GM plans’ interest in Woodfield Mall. CalPERS is eager to purchase the remaining interest in the regional shopping center for around US$ 500 million. The GM pension plan purchased the Woodfield Mall interest fourteen years ago.

Long-term investors are deeply interested in high-quality malls that can generate stable cash flows.

Woodfield Mall is the ninth largest shopping center in the United States. Buying trophy malls that provide strong cash flows is a rarity as many owners would refuse selling such an asset in a low-yield fixed income environment.

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