Partnership part-owned by Lennar falters

This story is not obviously one about our car-based way of life -- until you realize that the Lennar Corporation is in the business of building large scale, luxury suburban-style condominium developments and has plans to do so in San Francisco also.

Posted on Mon, Jun. 09, 2008
Associated Press

A 15,000-acre California real estate partnership that is part-owned by Miami-based Lennar and LNR Properties has filed for Chapter 11 bankruptcy protection.

LandSource Communities Development LLC issued a news release late Sunday to announce the bankruptcy filing in U.S. Bankruptcy Court in Delaware. The partnership's assets include 15,000 acres of undeveloped land north of Los Angeles in the Santa Clarita Valley, making it one of the largest land deals to falter amid the national housing glut.

The California Public Employees' Retirement System, its main investor and the nation's largest public employees pension fund, did not immediately return calls early Monday. Miami-based Lennar and LNR Property each own a 16-percent stake in LandSource.

LandSource had been trying for months to restructure a $1.24 billion debt, the company said. It received a default notice on April 22 after missing a payment when a decline in the assessed value of that Southern California land holding triggered an additional charge.

''LandSource believes Chapter 11 provides the most effective means for the partnership to preserve the values of its business . . . while it works with creditors to achieve a long-term restructuring,'' spokeswoman Tamara Taylor said in the release.

Attempts to reach Taylor and LandSource before business hours were unsuccessful.

LandSource operates in California, Arizona, Florida, New Jersey, Nevada and Texas. The partnership announced it has received a $135 million line of credit from a group of lenders led by Barclays Bank, allowing it to fund operations during the Chapter 11 period.

CalPERS, with $254.8 billion in assets, is involved in LandSource through its participation in MW Housing Partners, an investment fund managed by MacFarlane Partners LLC.

MW Housing Partners acquired 68 percent of the Santa Clarita property from home builder Lennar Corp. and LNR Property Corp., a unit of Cerberus Capital Management LP.

Lennar and LNR each maintained a 16 percent interest in LandSource.

Taylor last month told the Associated Press that she did not know the size of CalPERS' stake in MW Housing Partners.

CalPERS provides pension, healthcare and other retirement services for about 1.5 million public employees.