Those who have committed to Fund II consist of "several top-tierinstitutional investors," according to Michael K. Hayde, chiefexecutive officer of locally based Western National. He notes thatthis was the initial closing of Fund II and that its final close,to take place in 2008, will total at least $300 million of equitycommitments.

Fund II is focused solely on multifamily acquisitions anddevelopment projects. The current investors include primarily majorstate employee pension funds, life insurance companies andinvestment banks, but also include many of Western National'slong-term high-net-worth investors.

Hayde says that although institutional demand for multifamily inSouthern California remains steady, "The institutions are moreselective" now. He explains that they are seeking verticallyintegrated multifamily firms with strong track records, long-term,multi-cycle experience by management and a focus on quality assetsin top-tier markets.