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PESP calls on NCRS to halt investment in Landmark’s Progress Residential

March 8, 2023

Tenants, retirees and community allies across North Carolina have been organizing around the North Carolina Retiree System’s (NCRS) investment in Progress Residential, observing the negative impact the company has had on the residents and communities of North Carolina.

PESP’s testimony at the NCRS meeting asked that NCRS halt any future investments in Landmark, instead using its influence as the largest pension fund investor in Landmark to ensure that Progress Residential makes its housing safe, affordable, and accessible.

PESP’s Justin Flores said, “North Carolina invested $200 million in Landmark Real Estate Partners VIII, which is the specific Landmark fund that invested in a portfolio of 20,000 homes owned by Pretium, the private equity owner of Progress Residential. This specific Landmark fund also invested in the acquisition of a company, which is now part of Progress, which owned 14,500 single family rental homes. This means that the North Carolina Retirement System has an investment in about 35,000 homes owned by Progress Residential.”

NC retiree and NCRS participant Suzy Winters had her statement read by PESP’s Mad Bankson. “As a recipient of a pension from the state of North Carolina, I am pleased that the health of the fund is strong. If the goal of the fund is to invest in funds that maximize for the benefit of state employees, I believe that benefit  includes looking at the costs associated with those investments.

Winters’ statement continued, “I humbly ask that with the power and strength that you exhibited to build a healthy retirement fund, you use this strength to pressure corporate funds managers to require these landlords to cap future rent increases to no more than 3% and to maintain local resources in each community for property management that is responsive to their tenants.”

Activists and tenants also launched an email action calling on North Carolina’s Treasurer Dale Folwell and Christopher Morris, Co-Chief Investment Officer at State of North Carolina – Department of State Treasurer to stop new investments with Landmark Partners in the future and to use its leverage to ensure that Progress Residential takes concrete steps to make its housing safe, affordable, and accessible to all.

Private Equity Stakeholder Project (PESP) recently published a report documenting the North Carolina Retirement System’s investment of $2.6 billion in the private equity firm Landmark Partners since 2017. No other pension fund has invested more than $500 million in Landmark during this time.  Landmark is a major investor in the controversial corporate landlord Progress Residential, which owns almost 8,000 single family rental homes in North Carolina.

Although there has been no response to PESP’s repeated requests for a formal meeting with the Treasurer’s office and impacted tenants, the report did prompt an email from a representative in the General Assembly which contained additional details about the Retirement System’s investments.

Progress Residential, which is now the largest single family rental company in the country, was specifically singled out in a Congressional report for filing to evict thousands of tenants during the federal eviction moratorium, and has been the subject of numerous media stories about its treatment of tenants, including in North Carolina. Havenbrook Homes, a subsidiary of Progress, is being sued by the Minnesota Attorney General.

In January, the City of Minneapolis imposed specific conditions on Progress that it has to meet in order to operate there. In February an Atlanta TV story detailed how some Progress tenants had their water shut off for several days, even though they had paid their bill to Progress, which was then supposed to pay the homeowners association.

Progress has continued to grow at a rapid pace, adding 2,000 new homes a month. At this rate, Progress will own over 100,000 single family rental homes before the end of the year, and the North Carolina Retirement System has played a role in this growth.

Rather than engaging in dialogue with concerned North Carolinians or using its leverage to mitigate these issues, the Treasurer’s office has instead chosen to downplay its involvement with Landmark and distance itself from the problem.

This ignores that as Landmark’s top investor among pension funds, NCRS is in a unique position to act on behalf of North Carolina tenants and demand that Landmark use its influence to ensure that Progress Residential makes its housing safe and affordable.

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