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LOS ANGELES-Former California treasurer Phil Angelides, a veteran of the commercial real estate industry before he was treasurer, has joined Los Angeles-based Canyon Capital Realty Advisors as a principal and as chairman of a new fund that plans to invest $2 billion to acquire some 10,000 units of market-rate work force rental housing and mixed-use projects in cities across the US. Angelides and Bobby Turner, managing partner of Canyon Capital Realty Advisors, tell GlobeSt.com that the new investment vehicle, called the Canyon-Johnson Urban Communities Fund, expects to start acquiring properties in the second quarter of this year and that once it hits its stride, it should be able to deploy all of its capital in about a year.

Angelides describes the new fund as “an extraordinary opportunity to respond to the growing need for rental work force housing in America’s urban centers.” He cites a series of factors that are driving the demand for new rental housing in cities, which in turn is driving the new investment effort by Canyon Capital.

Among the factors Angelides cites are a projected increase of 120 million in a US population that is expected to grow primarily in urban areas, rising popular and governmental pressure to constrain suburban development in favor of more concentrated development in cities because of concerns about global warming, and a projected need for more than four million new rental units in the US over the next 10 years. “There is a great opportunity to buy rental properties, improve them, green them and really create a good living environment for working people in urban centers,” Angelides says.

Turner tells GlobeSt.com that the Canyon Johnson Urban Communities Fund is “just a logical brand extension for Canyon-Johnson,” which also sponsors a fund with a similar name but a different strategy. The other fund is the Canyon Johnson Urban Fund, which is a development vehicle that provides equity capital to local development partners in cities around the US. The new fund differs in that it will be a platform to directly purchase existing for-rent housing, Turner explains.

The new fund will expect to raise about $1 billion of equity and, with conservative leverage, invest about $2B, according to Turner, although he says it’s possible that leverage might go to 60%. Angelides says that the investment and improvement program for the multifamily properties “can create value for investors as well as for the families that will live in our communities.”

The former state treasurer explains that the goal of the fund will be to fix up units, add amenities and “be a ground-breaker in greening multifamily properties by making them energy-efficient” and environmentally friendly in every respect. In addition to these goals, the new fund will “follow the Canyon tradition of programs of enrichment for people who live in the communities” by establishing after-school programs to serve the residents.

The fund is also looking at making some 3% to 5% of the units available on a subsidized basis to teachers and police officers who are willing to participate in those after-school education and safety programs. Turner adds that the enrichment programs that Canyon envisions recognize that urban dwellers are “sophisticated consumers wanting the same things as suburban consumers in the form of price, quality, service and selection.”

The Canyon-Johnson Urban Communities Fund is a partnership between Canyon and Earvin “Magic” Johnson, former Los Angeles Lakers basketball star, who has played a key role in the Canyon-Johnson Urban Funds. Those funds have invested in 30 major urban projects representing more than $4 billion in value in diverse and underserved communities throughout the country. Canyon-Johnson is part of Canyon Capital Realty Advisors LLC and its affiliate Canyon Capital Advisors LLC, which have nearly $20 billion of capital under management.

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