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At California Treasurer Fiona Ma’s Request, CalSTRS Board Discusses Investment with CBRE

Business Wire



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The $241 billion fund considers whether to invest with CBRE midst sexual harassment allegations, labor disputes

SACRAMENTO, Calif.–(BUSINESS WIRE)–On September 5, CalSTRS held an agendized discussion, at California State Treasurer Fiona Ma’s request, to discuss whether to continue investing in CBRE Global investors. Over the last two years, two properties in which CalSTRS invested through CBRE have been the subject of labor disputes.

CalSTRS had $32 billion invested in hotels, office buildings, retail, housing and other real estate as of July 31, 2019, which are serviced by housekeepers, janitors, and other service workers.i CalSTRS Board has a fiduciary duty to ensure its real estate investments are not negatively affected by human capital risks, headline risks, and other risks associated with sexual harassment and labor disputes.

State Treasurer Fiona Ma has led efforts to ensure responsible investment practices and mitigate the risks to investors from sexual harassment through the Trustees United initiative.

Private equity real estate investment manager CBRE Global Investors has faced labor disputes at the Irvine Marriott hotel and Pullman San Francisco Bay hotel, and a sexual harassment lawsuit covered in Bloomberg at the Irvine Marriott. The disputes have included picket lines and anti-union activity by CBRE’s operators at both hotels.

CBRE Strategic Partners U.S. Value Fund VII owns the Pullman San Francisco Bay hotel, where a labor dispute has now drawn on for nearly two years. CBRE has been unable to get its operator to sign a labor peace agreement, which would end the dispute. The Pullman’s General Manager told hotel workers that CBRE marketed the hotel for sale last year, but was unable to sell it.

In July, CBRE sold the Irvine Marriott without having resolved the sexual harassment allegations or the labor dispute. The 496-room Irvine Marriott sold for $152 million, or $307,061 per room, after the firm bought the hotel for $128.5 million and spent $30 million on renovations.ii Over the past year, other Southern California hotels that were not facing labor disputes sold for a higher price per room.iii

CBRE competitors CIM, Blackstone Group, Rockpoint and Brookfield have all signed labor peace agreements binding on their hotel operators.

“Sexual harassment and labor disputes can occur not only in hotels, but also in other industries where CBRE and its peers invest,” testified Susan Minato, Co-President of UNITE HERE Local 11. “We ask that CalSTRS not reinvest with CBRE until the firm gets its operator to sign a labor peace agreement at the Pullman or hires a new one that will.”

Jennifer McAfee, a member of the United Teachers Los Angeles Board of Directors and Dodson Middle School teacher, also spoke today. “I ask for CalSTRS to refrain from any more investments in CBRE until they address labor disputes and allegations of sexual harassment, and stops conducting anti-union practices. I hope that we can find a way to work together to protect our investments.”

UNITE HERE Local 11 is a labor union representing over 31,000 hospitality workers in Southern California and Arizona that work in hotels, restaurants, universities, convention centers and airports.




iii These properties include the Hyatt Regency La Jolla, which sold for $352,518 per room in August 2019, the Hotel Amarano Burbank, which sold for $552,272 per room in July 2019, and the 375-room DoubleTree Culver City, which sold for $402,933 per room in August 2018.


Rachel Sulkes

(602) 327-4084

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