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County’s Real Estate Pioneers Aren’t Finished, But Change Stirs; New Model: Towers, Lennar

A gradual, but inevitable, real estate shift is under way.

The men who developed many of Orange County’s marquee office towers, business parks, neighborhoods and shopping centers during the past few decades are aging.

They include the biggest names in real estate here: The Irvine Company’s Donald Bren, homebuilder William Lyon, South Coast Plaza’s Henry Segerstrom and office tower developer Donald Koll.

To be sure, real estate is in their blood,and they’re reluctant to give it up.

But there’s no denying that the county’s big-persona developers have more years of building under their belts than they likely have ahead of them.

Meanwhile, a new kind of developer has emerged here, one that stands to forge the look of the county in the next decade and beyond. Think Miami’s Lennar Corp.

The differences are notable.

OC’s entrepreneurial developers have sought to call their own shots. They made fortunes and sometimes lost millions in the booms and busts of the past decades. Above all, they shaped how the county would look, forging a new type of suburbia that some have dubbed “edge cities” or “exurbia.”

Lennar, meanwhile, is Corporate America, a publicly traded developer that sees redevelopment as the future of OC, complete with high-rise condo towers and urban enclaves.

The company, which has its California headquarters in Aliso Viejo, has proven adept in two worlds,OC’s personality driven real estate market and Wall Street.

“You are starting to see the emergence of the next level of business people,” said Randy Jackson, president of Costa Mesa’s The Planning Center, which works with cities and developers on land planning. “They have master’s degrees and have not necessarily come up in the ranks.”

The makings of a transition in OC real estate are in place. But it will be drawn out. The county’s most influential and oldest real estate players remain entrenched.

Bren and Rancho Mission Viejo LLC’s Richard O’Neill and Anthony Moiso even have plans in the works for major developments that stand to add thousands of homes.

Segerstrom, meanwhile, is eyeing high-rise condos near South Coast Plaza.

Koll hasn’t put up an office tower in a few years but is busy developing in the Irvine Spectrum and elsewhere.

At 82, William Lyon doesn’t seem ready to retire, having just unsuccessfully tried to buy out and take private William Lyon Homes Inc. of Newport Beach.

Bren, 73, works daily and “is deeply enmeshed in every aspect of the company,” said Bill Rams, a spokesman for the Irvine Co.

“He shows no sign of slowing down or contemplating retirement,” Rams said. “His business mentors and heroes are Arnold Beckman and Earle Jorgensen. They worked all their lives, into their 100s.”

Bren took control of the company in the early 1980s, just as development started to heat up in the county’s southern half. His development legacy includes: Newport Center and Fashion Island, the Irvine Spectrum, Shady Canyon and shopping centers, apartments and hotels.

In the works is a massive Irvine development dubbed Northern Sphere and homes in the hills of Anaheim and Orange.

Bren also has set aside a vast swath of the Irvine Ranch as open space.

Two of Bren’s sons are active in real estate here, heading their own companies. Neither holds executive positions at the Irvine Co.

Lyon, 82, still controls his homebuilding company, though his son has taken on more responsibility with an eye to succeeding his father someday, ac-cording to sources.

Responsibilities at Newport Beach-based the Koll Co. are spread among four managing principals, including Koll, Jerry Yahr, Bryan McGowan and Alan Airth, according to company spokesman Edward Lohnes. There isn’t a need for a succession plan, he said.

Koll, who developed prominent office towers and business parks here, “continues to actively direct a full scope of planning, development and management activities, with a focus on both commercial activities and golf and resort development properties,” Lohnes said.

Nor does Segerstrom, 82, show any signs of giving up power at his family company. C.J. Segerstrom & Sons has plans in the works for two towers near South Coast Plaza that could combine offices and hotel rooms with condos.

Others have taken the middle road.

John Parker, 78, spends some time each week away from the company he founded, Aliso Viejo’s Parker Properties LLC, developer of Aliso Viejo’s Summit Office Campus.

Parker still is chairman and comes in to plot strategy with his son, Russ Parker, Parker Properties’ vice chairman, and son-in-law Lee Redmond, who’s chief executive.

In April, Parker Properties hired Kevin McKenzie as a partner, the first from outside the family.

“Let’s face it, at some point I’m not going to be around, as sad as that is,” the elder Parker said.

More than projects, Parker said he looks back with the greatest fondness on people he mentored since starting here as a commercial broker in the 1960s.

“I look back on the growth of my son and son-in-law and how they stepped up to the plate,” Parker said.

A generational shift is taking place at other companies.

Peter Shea Jr. earlier this year became chief executive of Walnut’s J.F. Shea Co., which has its commercial and homebuilding arms in OC.

Shea, 38, co-manages the company with uncle and Chairman John Shea and is being groomed to head the company on his own.

In a more decisive split, Bryon Hoffman earlier this year sold Irvine-based The Hoffman Co., which he founded in 1978 and is the county’s oldest land brokerage.

The company now is in the hands of two of Hoffman’s prot & #233;g & #233;s: Norman Scheel, 39, and Tom Dallape, 38.

“All of our brokers stayed,” Scheel said of the switch.

Generational shift can be long and delicate, according to Robert Theirgartner, chief operating officer of Newport Beach’s Davis Partners LLC.

Theirgartner began taking more of a lead role with the development company in 2000. His boss, Bill Davis, started the company in the mid-1970s.

Theirgartner said he has gone from being a partner in individual deals to being a partner in the company. He now manages daily operations.

“In all honesty, I feel like I have been given a huge responsibility,” he said. “Bill started and created a successful company. Now I’m obligated to continue that.”

The added complexity of development,with environmental challenges, scarcity of land and other factors,is precipitating changes in real estate.

Bren, Lyon and others have adapted by making their companies more corporate as real estate matures here.

“The complexity has gotten greater and greater,” Parker said. “When we got involved in the 1960s in real estate, the complexity wasn’t near what it is today. You had lots of land. You didn’t have environmental challenges.”

The county also is shifting from development of open space to redevelopment. That’s brought Lennar and other corporate developers, including Canada’s Bosa Development Corp. and Los Angeles-based Maguire Properties Inc.

The county is in the midst of an unprecedented boom in high-rise housing, with some 30 towers planned or under construction here.

Lennar, headed locally by Chief Operating Officer Jon Jaffe and California President Emile Haddad, is playing a leading role, as are other developers based outside the county.

As such, real estate here is starting to shift away from the old model of a one-man show, The Planning Center’s Jackson said.

Lennar is the model for the modern player here, according to Jackson.

The company, known for emphasizing an egalitarian corporate culture, is tackling some of the largest redevelopment projects in the county. It’s acquired the former El Toro Marine base, a big chunk of the former Tustin Marine base, and a couple of swaths of land next to Angel Stadium of Anaheim.

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