Pension Fund to Invest in Local Homes : Real estate: CalPERS will provide $20 million for a 2,500-house development in Rancho Santa Margarita.

By DEBORA VRANA

May 6, 1994 12 AM PT

SPECIAL TO THE TIMES

RANCHO SANTA MARGARITA — The nation’s largest public-employee pension fund said Thursday that it will invest $20 million in a 2,500-home, master-planned development in south Orange County as part of its program to help create housing in California.

The California Public Employee Retirement System, known as CalPERS, with $80 billion in assets, has created a joint venture with the Santa Margarita Co., the master developer of Rancho Santa Margarita. The partnership will begin to develop Las Flores, a 1,005-acre community in the southeast area of the county, which may signal a new willingness by investors to enter the local real estate market.

For the record:

12:00 a.m. May 20, 1994 For the Record
Los Angeles Times Friday May 20, 1994 Orange County Edition Business Part D Page 2 Column 6 Financial Desk 1 inches; 32 words Type of Material: Correction
South County development--A May 6 report on financing for the master-planned community of Las Flores misidentified its location. Las Flores is next to Rancho Santa Margarita. Both are being developed by the Santa Margarita Co.

“This is part of our single-family housing development program started in 1992,” said Patrick Hill, spokesman for CalPERS in Sacramento. “For CalPERS this is viewed as an attractive investment with a good return. In addition, it helps the economy by providing capital to builders.”

In Rancho Santa Margarita, CalPERS will be acquiring and developing the land and then selling the lots to developers who will actually build the homes, Hill said.

Since 1992, the CalPERS program has invested in 59 projects statewide with at least half of them in Southern California. It has invested in 12 Orange County projects, including the Pacific Grove development in Aliso Viejo, which has 138 single-family homes priced from $176,900 to $206,000, all built by Pacific Gateway Homes, said Hill.

CalPERS has approved additional investments in Aliso Viejo, including Pacific Grove II, where 94 homes are planned by Pacific Gateway, said Horace Hogan, executive vice president with Pacific Gateway, a 5-year-old home-building company based in Aliso Viejo.

Hill predicted there would be more investment by the state in Orange County housing developments. The Las Flores plan includes single-family detached homes, condominiums and rental units. At least 25% of the homes will be designated as low-income housing.