by Calculated Risk on 6/09/2008 01:58:00 PM

There are a number of stories this morning on the LandSource bankruptcy (hat tip El Pato, Ed, Bob, Brian and many others). It was pretty clear in April that LandSource would file bankruptcy, it was just a matter of when.

LandSource owns 15,000 acres of land in the Santa Clarita Valley approximately 30 miles north of downtown Los Angeles. (top of map)


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An interesting part of the story is that the California Public Employees' Retirement System (CalPers) invested at the top, and might lose most of their investment. They really should have known better in 2007!

From the WSJ: LandSource Chapter 11 May Hit Calpers

The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.

Calpers has approximately $255 billion in assets, so this loss - almost $1 billion - is actually pretty minor.

Another interesting point: this is the kind of area that is being hit hard with gasoline prices over $4 per gallon. Imagine working in downtown LA with a 60 mile round trip commute each day. At 15 miles per gallon that is over $16 per day - a significant amount for lower paid workers. To say nothing about spending 1 1/2 to 2 hours per day stuck in LA traffic.