Editorial: CalPERS made a bet – and lost

Editorial: CalPERS made a bet – and lost - Sacramento Opinion
"CalPERS made aggressive investments in real estate at the worst possible time, when inflated property values had peaked and were already beginning to decline.
As The Sacramento Bee's Dale Kasler detailed in a recent article, one CalPERS real estate misstep stands out in particular. In February 2007, CalPERS invested $922 million in a deal with LandSource Communities Development LLC that involved thousands of homes and lots in seven states including Florida, Arizona and California.
A month before the investment was finalized, Lennar Homes, a principal partner in the LandSource deal, announced it was writing off $500 million in real estate assets because of deteriorating market conditions. That should have served as a clear warning to CalPERS, but it did not.
Sixteen months later, LandSource filed for Chapter 11 bankruptcy. Depending on what assets the partnership sells to pay off creditors, CalPERS could lose its entire investment, nearly $1 billion."