CalPERS to Invest in Housing Development Program
CalPERS to Invest in Innovative, $73 Million Single-Family Housing Infill Development Program
Effort to be Managed by New Faze Development, MacFarlane Partners and Weyerhaeuser Realty Investors
SACRAMENTO, June 13, 2006 – New Faze Development, MacFarlane Partners and Weyerhaeuser Realty Investors jointly announced today that the California Public Employees’ Retirement System (CalPERS) is investing in a $73 million fund designed to meet the growing demand for urban homeownership in California.
The fund, which will focus on developing housing in infill locations statewide, will be managed by a new partnership involving the three firms: New Faze, a smart-growth development firm based in Sacramento; MacFarlane Partners, one of the nation’s leading real estate investment managers; and Weyerhaeuser Realty Investors, which has invested in single-family housing developments for more than 35 years.
“Urban real estate – especially housing – is a vibrant and growing market across California,” said Jose McNeill, portfolio manager of CalPERS. “We see this investment as important recognition of the rapidly escalating values of infill development across California. Our partners have the right experience, market knowledge and development expertise to deliver substantial returns for CalPERS’ members.”
CalPERS is investing $56 million in the fund, with the three co-managers contributing a total of $17 million. Operating as New Faze Investment Fund I, the new partnership is expected to develop just over 2,000 housing units and residential lots worth an estimated $600 million. The partnership will acquire, entitle, market and resell detached single-family homes, attached residential condominiums, and residential lots in urban and suburban infill locations, primarily in Northern and Central California.
“The CalPERS investment is another positive step in the continued growth of our company,” said Allen Warren, president and CEO of New Faze Development. “We look for opportunities to build homes and commercial properties that help create and grow vibrant neighborhoods. We welcome the CalPERS investment as an important contribution to help fill this rapidly growing market in California.”
New Faze Development’s real estate portfolio currently exceeds $1 billion in retail value. The firm will contribute 21 existing land investments to the new partnership, all of which are in the predevelopment stage. The assets are located in Sacramento and its immediate suburbs; Placerville, a city in the Sierra foothills; the Northern California cities of Chico, Oroville and Yuba City; and Merced in California’s Central Valley. The new partnership also will be acquiring additional properties in these and other markets.
CalPERS — the nation’s largest public pension fund with assets of $207 billion has allocated $5.8 billion for single-family housing development and $3.7 billion for urban real estate investments in California. MacFarlane Partners and Weyerhaeuser Realty Investors have jointly invested in single-family residential development projects on behalf of CalPERS since 1995, helping to develop nearly 40,000 single-family homes/residential lots with aggregate revenue of more than $9 billion.
“With this investment, we will be building housing that appeals to a wide range of home buyers in some of California’s fastest-growing areas in partnership with a highly regarded developer that has worked extensively in the region,” said Philip E. Ferrari, executive vice president of Weyerhaeuser Realty Investors. “With that kind of solid foundation, we believe the fund will be an attractive opportunity for CalPERS.”
“These investments not only deliver high returns, they also help revitalize our cities and provide tangible benefits for people who choose to live in an urban environment,” said Victor B. MacFarlane, founder and managing principal of MacFarlane Partners. “New Faze Investment Fund I is particularly exciting because we all are committed to the principles of smart growth – taking advantage of underutilized sites and existing infrastructure to create places where people can live, work and play, all in the same neighborhood.”
New Faze Development, based in Sacramento, has developed high-quality, affordable and moderately priced single-family homes in California since 1990. Its projects include infill residential developments, commercial developments for community enhancement, and the rejuvenation of outdated and underutilized buildings. Among New Faze’s redevelopment projects are Del Paso Neuvo, Alchemy at R Street, Antelope Place, Victoria Station, and Sun Meadows all in the Sacramento area.
MacFarlane Partners, based in San Francisco, is one of the leading real estate investment management firms in the United States and has successfully served as a real estate investment manager for CalPERS since 1991. Founded in 1987, the firm manages $9.7 billion in real estate assets.
Weyerhaeuser Realty Investors, has been making equity investments in single-family housing development projects since its formation in 1970. Originally established to diversify Weyerhaeuser Company’s investment in wholly owned development companies, WRI has invested alongside small and mid-sized builders for more than 35 years. It is headquartered in Seattle and operates nine regional offices throughout the West, with newly opened offices in Illinois and Virginia.
For New Faze Development, contact:
For MacFarlane Partners, contact:
For CalPERS, contact:
Brad W. Pacheco
Assistant Division Chief, Public Affairs
California Public Employees’ Retirement System