-- Posted by Edward on 5:16 pm on Oct. 13, 2002 http://www.newsday.com/business/local/newyork/ny-bzaol102959881oct10,0,6075366.story Pension Fund May Put Money In AOL's HQ COMBINED WIRE SERVICES October 10, 2002 The California Public Employees' Retirement System may buy a stake in the $1.7-billion AOL Time Warner Center, the biggest U.S. office project under construction. "We're looking for permanent financing when it opens," said Stephen Ross, whose Manhattan-based Related Cos. is developing the complex at Columbus Circle with a real estate fund managed by financier Leon Black's Apollo Management LP. The largest U.S. pension fund is one of two potential investors "we're talking to," Ross said. He wouldn't identify the other. "You've got a superior asset, a superior market, and the ability to put a large investment into one asset," said Scott Latham, a senior director of Cushman & Wakefield. "That offers efficiencies to funds like Calpers they can't find in other places." When completed next year, the 2.8-million- square-foot, two-tower complex at the southwest corner of Central Park will be the headquarters of AOL Time Warner Inc. It also will include a 250-room Mandarin Oriental hotel, 225 high-rise apartments, shops, production studios for CNN, and the Jazz at Lincoln Center concert hall. Calpers and a partner, MacFarlane Partners LLC, are in talks to acquire a 50 percent interest in the development's 325,000-square-foot retail space, parking garage and 318,000 square feet of office space not occupied by AOL Time Warner, said people familiar with the matter. AOL Time Warner will own its office space through a condominium structure. Brad Pacheco, a spokesman for Calpers, confirmed the fund is looking at the property. He declined to elaborate further. The AOL Time Warner Complex is slated to open in fall 2003. About 60 percent of the retail space is leased, and another 15 percent to 30 percent is close to contract, Ross said. About one-third of the non-AOL office space has been pre-leased, and more than 40 percent of the condos have been sold, he said. Copyright © 2002, Newsday, Inc.