JER investment goes into administration

City Lofts, the UK city center residential developer that JER helped take private last year, has succumbed to the property downturn.

A company that JER Partners took a reported 30 percent stake in alongside Lehman Brothers has gone into administration amid the UK housing slump.

City Lofts, which develops apartments in city center locations across the country, has appointed accountancy firm Ernst & Young to handle its affairs.

The collapse comes amid a serious downturn in the UK property market that has led to major housebuilders announcing plans to lay off hundreds of staff. Bovis Homes and Redrow said this week they would shed a total of 950 jobs between them in the latest sign of distress.

The collapse of City Lofts is a high-profile problem for the McLean, Virginia-based JER Partners, which teamed up with Lehman Brothers to take the company private in January 2007. The pair reportedly own 30 percent of the company while the rest is owned by founders Stuart Wright, Rossano Mansoori-Dara and Anthony Brooks.

JER made the investment out of its JER Europe Fund III, which closed on €809 million ($1.1 billion) in June last year. The stake in City Lofts was one of 13 transactions it had made at the time.

Prior to the take private, JER struck up a joint venture agreement to create luxury apartments at a property in Paris at a time when City Lofts first started to licence its product in certain parts of Europe.

JER has made no public statement about City Lofts.