CalPERS Taps Four Real Estate Firms for Urban In-fill Development; System also establishes $150 million affordable housing investment program.

Business/News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--June 19, 2001

The California Public Employees' Retirement System (CalPERS) has selected four real estate investment partners to invest $200 million in the development of real estate projects in California urban settings.

The pension fund also earmarked $150 million to establish a new affordable multi-family housing investment program by the end of the year.

Both actions, part of CalPERS California Urban Real Estate Initiatives (CUREI) program, harness the investment opportunities created by the growth of California's population and the shortage of affordable housing and general development in California's urban locations. System officials believe the move will help to diversify the Fund's real estate portfolio in order to achieve greater returns while meeting a critical need for housing and development in urban localities.

The four urban real estate investment partners selected focus on the development and redevelopment of multi-family units, single family housing, industrial, office and mix-used property types in urban settings. The investments include:

-- $60 million to Buchanan Street Partners, Inc. with offices in Newport Beach and San Francisco, California;

-- $60 million to Capri/Capital Advisors, L.L.C. with offices in Los Angeles, California and Chicago, Illinois;

-- $40 million to Irvine, California-based Institutional Housing Partners, Inc.; and

-- a $40 million contingent investment to San Antonio, Texas-based American CityVista Ltd. CalPERS investment with American CityVista, a partnership between Cisneros Community Ventures and KB Home, is contingent upon the new start-up obtaining financial backing and support for operational and reporting processes to meet the requirements for an investment program with CalPERS.

"California's rapid growth is providing new investment opportunities for homebuilders and developers especially in underserved urban areas," said William D. Crist, President of CalPERS Board of Administration. "We are in a unique position to seize these opportunities for the benefit of our fund and members, while also helping to meet the housing and development needs of our State."

CalPERS Board expanded its CUREI program by $250 million in November 2000. The residual $50 million not allocated in this action will be available to any of the pension fund's urban in-fill partners who demonstrate satisfactory investment performance and need for additional capital.

The CalPERS Board also approved a $150 million affordable multi-family housing investment program that will focus on providing capital for the development of affordable housing units. The System expects to launch a search in August 2001 to retain up to three investment partners or advisors to administer the program. Selection of the partners is targeted for November 2001.

This marks the first time CalPERS has an affordable housing program that focuses on providing equity for multi-family affordable housing. The program will include projects with 70/30 and 80/20 market rate unit-to-affordable unit ratios.

"We have in place a diversified stable of partners and programs that can canvas California's urban markets," said Michael Flaherman, Chair of CalPERS Investment Committee. "Their work on our behalf will make our real estate portfolio stronger."

CalPERS CUREI program currently totals more than $1 billion in investments for urban in-fill development.

CalPERS is the nation's largest public pension fund with assets totaling more than $158 billion. The System provides retirement and health benefits to more than one million State and local public employees and their families. For further information on the System, please visit CalPERS web site at www.calpers.ca.gov.