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AGI, TMG Form $400M JV With CalPERS

SAN FRANCISCO-Developers AGI Capital and TMG Partners joint venture with the California Pension Employees Retirement System to develop urban-infill housing in Northern California.

By Brian K. Miller | Updated on November 13, 2006

(To read more on the multifamily market, click here.)

SAN FRANCISCO-AGI Capital and TMG Partners, two locally based developers, have formed a joint venture with the California Public Employees Retirement System to invest slightly more than $100 million of equity in urban-infill housing throughout California. With approximately 75% leverage, the joint venture, Avant Housing LLC, plans to invest $400 million over the next two or three years and completely liquidate the JV in no more than six or seven years, TMG Partners chairman/CEO Michael Covarrubias tells GlobeSt.com.

The goal is to produce a mid-teens IRR for CalPERS over the life of the joint venture. Covarrubias says the JV’s investments will include buying land and existing properties. It might buy entitled land for apartment or condominium developments, which it would have built and then sell off. It might just buy raw land, entitle it and then sell it to another developer. It might buy run-down apartment properties for repositioning or conversion to condominiums.

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