Bloomberg -- The Calfiornia Public Employees' Retirement System, the largest U.S. pension fund, invested in a new-home community two years after it reduced its involvement in similar projects following losses in the housing bust.

Calpers is one of three investors in a new development phase at Rancho Mission Viejo in Orange County, California, according to Robert Goodman, chief executive officer of Resmark Cos., a Los Angeles-based firm that invests in real estate for Calpers and the California State Teachers’ Retirement System.

“This is new money,” Goodman said in a telephone interview. “It’s absolutely superior real estate with superb, top-notch management, and we think it’s a good time in the housing cycle.”

Calpers, which had $266.1 billion under management as of Sept. 10, pared its new-housing investments and shifted its focus to income-producing property after the fund’s real estate portfolio had annualized losses of 27% in the three years through June 2010, according to a 2011 report. Now, U.S. residential land values are rebounding as homebuilders face a growing shortage of lots, especially in markets like Southern California, where projects can take years to win government approval.

The total investment in the Rancho Mission Viejo project is about $100 million, about a third of which comes from Calpers through Resmark, according to two people with knowledge of the deal, who asked not to be named because the transaction is private.

Resmark managed $366 million of Calpers $22.4 billion in real estate holdings as of March 31, the most recent figures available. Calpers extended its long-term agreement with Resmark last year, allowing it to put funds into new projects rather than give back unspent capital, according to Goodman.

“They are free to invest that capital per the strategy of the original partnership agreement,” Joe DeAnda, a Calpers spokesman, said in an e-mail.

The money will be used to build roads and other infrastructure for a community with about 2,400 houses and 300 apartments on 860 acres (348 hectares), according to Don Vodra, chief operating officer of Rancho Mission Viejo, a 23,000-acre ranch about 60 miles (97 kilometers) south of Los Angeles. The project would open to residents in 2015, he said.

Other investors in the new phase of Rancho Mission Viejo are the Lewis Group of Companies, an Upland, California-based developer, and J.F. Shea Co., a builder, contractor and developer based in Walnut, California. Randall Lewis, executive vice president of Lewis Group, and Bert Selva, CEO of Shea, didn’t reply to telephone messages seeking comment yesterday.

Calpers wrote off almost $1 billion from investments in Newhall Ranch, a master-planned community north of Los Angeles, that filed for bankruptcy in 2008. In January 2012, the pension fund sold its interest in 28 projects with 16,300 home sites run by Newland Real Estate Group LLC, a San Diego-based developer.

Under a plan adopted in 2011, the fund cut its “opportunistic” investments, including money in new developments, to a maximum 15 percent of its real estate portfolio from a previous maximum of 40 percent. Calpers is scheduled to review its investment targets in December.

Residents began moving this month into Rancho Mission Viejo’s first community, Sendero, which is approved for 941 homes and 286 apartments, according to Vodra. Prices start in the low $300,000s for townhomes and the high $500,000s for single-family houses, according to the Sendero website.

The median price of an existing home in Orange County rose to $675,000 in July, up 22.5% from a year earlier, according to the California Association of Realtors. The price peaked at $747,260 in April 2007.

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