From the Los Angeles Times:
Lennar buys back 15% stake in Newhall Ranch development at big discount
The home builder had sold its controlling interest in the project to CalPERS in 2007. The giant pension fund loses its nearly $1-billion stake.
A U.S. bankruptcy judge in Delaware cleared the way Monday for a home builder to buy back, at a substantial discount, a chunk of the Newhall Ranch development north of Los Angeles that it sold for nearly $1 billion to the California state retirement system in 2007.In other news at the Times:
Lennar Corp. said in a news release that it paid $138 million for a 15% stake in a new company, to be called Newhall Land Development Co. Five lenders will own the other 85%.The agreement concludes a fiasco for the California Public Employees' Retirement System, the nation's largest pension fund, which lost its nearly $1-billion stake.As part of the 2007 sale, Lennar retained a 32% stake in Newhall Ranch with rights to the first option to purchase land owned by the partnership.
The new company will be managed by Lennar's chief investment officer, Emile Haddad, who is leaving the Florida home builder to head the venture.
In 2007 Lennar, one of the nation's largest home builders, sold 68% of the development, which covers 15,000 acres in Newhall and Valencia, to CalPERS for $970 million. The purchase, made at the height of the real estate bubble, was one of several disastrous investments that led to CalPERS' losing roughly $3 billion in residential real estate in 2008.
In March, the corporation developing Newhall Ranch, LandSource Communities Development, filed for bankruptcy protection.
CalPERS' Newhall Ranch purchase, though apparently ill-timed in hindsight, was seen at the time as a potentially lucrative investment....MORE