CalPERS Took Huge Gamble at Worst Time

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Giant home builder Lennar Corp. started 2007 with a thud, writing off up to $500 million in real estate assets because of deteriorating market conditions.

But the news wasn’t all bad. On Jan. 2, 2007, the same day it revealed the write-offs, the Miami home builder and a partner announced they’d sold a nearly $1 billion stake in a real estate deal called LandSource Communities Development LLC.

The buyer: the California Public Employees’ Retirement System. The investment was one of CalPERS’ biggest bets on real estate, and one of its worst.


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