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Brower, Miller & Cole
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SCALA REAL ESTATE PARTNERS ANNOUNCES $200 MILLION INVESTMENT PROGRAM TARGETING CALIFORNIA RESIDENTIAL OPPORTUNITIES

Irvine, Calif.,  (October 1, 2007) -- With many homebuilders and residential developers facing challenging marketing conditions, Scala Real Estate Partners, LP has announced a $200 million joint investment program to acquire, develop or re-capitalize residential and mixed-use development projects in California.

Scala Real Estate Partners will partner with homebuilders and residential developers to provide capital to existing or planned projects, while utilizing its development expertise to add significant value to these investments.

Scala Real Estate Partners’ co-managing partners L.M. Cummings and Frank Zaccanelli, both former senior executives with the Perot Group’s Hillwood development and investment company, previously executed this strategy in California in the mid-1990’s by partnering with multiple homebuilders to reposition their existing assets and restructure their balance sheets.

“California’s homebuilders and residential developers may be in the midst of a tough market, but long-term supply and demand fundamentals for housing in California are still compelling.  Re-capitalizing existing projects may be an attractive strategy for many homebuilders,” noted Zaccanelli.

Initially, Scala Real Estate Partners will focus on opportunities in Greater Los Angeles, Orange County, San Diego and the San Francisco Bay Area.

“Our vision is to work with the developers and homebuilders to provide the capital infusion they need to move forward during a challenging market cycle. As experienced developers, we understand the nuances of the business and will work in partnership with homebuilders and developers to implement new strategies for these changing times,” Cummings added.

Over his 26-year career in real estate, L.M. Cummings has successfully been involved in more than $1.3 billion of real estate transactions, which have included residential and industrial land, single-family residential homebuilding and commercial property development.  In 1992, Cummings joined Hillwood to open its West Coast operation, Hillwood West, where investment activities focused initially on California and expanded to include Hawaii.  Under his leadership, Hillwood West successfully partnered with numerous homebuilders and residential developers.

Prior to co-founding Scala Real Estate Partners, Frank Zaccanelli was President of Hillwood.  He spent 14 years building Hillwood into one of the most respected private real estate investment and development companies in the United States.  Under his direction, Hillwood completed the acquisition, development and sale of more than 15 master-planned communities, among other property types.  During his career, Zaccanelli has acquired, developed and sold residential and industrial land, single-family residential and a variety of commercial properties in California, Texas, Hawaii and Costa Rica.  Zaccanelli is also the former President, General Manager, and minority owner of the Dallas Mavericks of the National Basketball Association.

The investment program will be managed by Scala Real Estate Partners and, along with Scala’s co-investment, will be capitalized jointly by Oxford Properties Group and Lehman Brothers Private Equity.

Oxford Properties Group is the global real estate platform for the Ontario Municipal Employees Retirement System (OMERS).  Oxford owns, develops, invests and manages approximately $15 billion of diverse real estate assets around the world.  OMERS is one of the largest pension plans in Canada with assets under management of more than $50 billion.

Lehman Brothers Private Equity manages a full-service real estate merchant banking business with two global equity funds aggregating $4.0 billion of equity capital and one mezzanine investment fund aggregating $1.1 billion of equity capital.

Scala Real Estate Partners, LP is a real estate investment and development firm headquartered in Irvine, California.  Additional information about the firm is available at www.scalarep.com.