Lennar buys back 15% stake in Newhall Ranch development at big discount
Los Angeles Times
By Peter Y. Hong and Marc Lifsher
... A U.S. bankruptcy judge in Delaware cleared the way Monday for a home builder to buy back, at a substantial discount, a chunk of the Newhall Ranch development north of Los Angeles that it sold for nearly $1 billion to the California state retirement system in 2007. Lennar Corp. said in a news release that it paid $138 million for a 15% stake in a new company, to be called Newhall Land Development Co. Five lenders will own the other 85%...
... As part of the 2007 sale, Lennar retained a 32% stake in Newhall Ranch with rights to the first option to purchase land owned by the partnership. In March, the corporation developing Newhall Ranch, LandSource Communities Development, filed for bankruptcy protection. CalPERS' Newhall Ranch purchase, though apparently ill-timed in hindsight, was seen at the time as a potentially lucrative investment.
At the time of the purchase, "I would have said that Newhall Ranch was going to be a winner," said Richard Green, head of USC's Lusk Center for Real Estate. "If I thought that at the time, criticizing others for doing the same would be unfair."
In the decade ahead, he added, the Newhall Ranch development still may be a winner.
"I wouldn't be surprised that in 10 years this isn't looking like the really golden thing to do," Green said...