New Home Co., a startup homebuilder run by prominent local industry executives, is buying 50 acres in north Irvine with plans to build an upscale, gated housing project.
The Aliso Viejo-based company, headed by former John Laing Homes chief executive Larry Webb, is buying Lambert Ranch, a family tract of raw and farm land in the Portola Springs area near the former El Toro Marine base.
New Home made a non-refundable deposit on the land last week and has until the end of the year to close on the buy, according to Webb, the company’s chief executive.
Terms of the deal weren’t disclosed. Smaller parcels in the area for homes have been selling for $1 million to $2 million an acre.
If the buy closes, it would be the largest housing land sales seen in Orange County in several years.
New Home, which has been building pricey homes in Irvine’s nearby Woodbury area, envisions a gated community set amid Lambert Ranch’s hills. The land could hold 169 detached homes.
Lambert Ranch is being planned as Irvine’s most expensive housing area after Shady Canyon, according to Webb.
Work at the land could start next year, with the project’s grand opening slated for early 2012.
New Home has been encouraged by the pace of sales it’s seen for its homes going up in Woodbury, according to Webb.
The company’s first 60 homes, built under the Carmel name, are priced at close to $1 million each. They’re the most expensive homes currently going up in Woodbury and largely have sold out.
New Home plans for another 40 or so homes at Woodbury and is looking at a few other places in OC to build on, Webb said.
The success at Woodbury has helped New Home post a profit—“a little, not a lot”—in its first year of operation, Webb said.
“We’ve exceeded our expectations,” he said. “A year ago, I wondered if we were out of our minds.”
Biggest Deal Yet
The Lambert Ranch deal would be by far the largest to date for New Home, which also is building in Northern California.
Along with Webb, the company’s partners include two other onetime John Laing executives—former chief financial officer Wayne Stelmar and Tom Redwitz, who previously ran the homebuilder’s luxury division.
New Home’s fourth partner is Joe Davis, the former head of homebuilding operations for Newport Beach’s Irvine Company. Davis heads up land acquisitions at New Home.
Lambert Ranch is one of a few developable chunks of Irvine land not owned by Irvine Co.
The namesake Lambert family—longtime farmland operators in Irvine—owns about a third of the ranch, which the family bought in 1915.
Another longtime local farming family and landowner, the Fujishiges, is said to hold the rest of the land.
The two families worked to get Lambert Ranch rezoned for housing about four years ago, with an eye on a sale.
The 50 acres at the site are off Portola Parkway and include a mix of flatter areas and hills with views of the city.
The New Home project is expected to consist of three neighborhoods. The company could end up selling one of the areas to other builders, Webb said.
New Home has some big backers for the project.
A New York-based private equity firm that’s been an active OC investor of late is partnering in the Lambert Ranch deal, according to New Home.
Earlier this month, New Home also announced an undisclosed investment in the company from Irvine’s IHP Capital Partners and Santa Monica-based Watt Cos.
The investors count ties to Webb’s former company. IHP Capital invested in several John Laing projects. The company’s president, Doug Neff, was a former John Laing board member.
Watt owned about 30% of Irvine-based John Laing—the country’s second-largest privately held homebuilder—before its $1.1 billion sale to Dubai’s Emaar Properties in 2006.
John Laing filed for bankruptcy and went out of business in 2009. New Home has been trying to buy a few smaller projects from John Laing, which has been selling off assets.
Webb, who headed John Laing from 1995 to 2007, said he “never thought about retiring” after leaving the homebuilder.
Early on, he helped in the restructuring of LandSource Communities Development LLC, a big development in the Santa Clarita Valley that had fallen into bankruptcy.
The latest batch of funding from IHP Capital and Watt should be enough to last New Home for another 12 to 18 months, Webb said.
“If I’ve learned anything from the last (cycle), it’s that I’m going to have low overhead, forever,” he said. “Smaller works a little better for me.”
New Home has about 30 people right now in Aliso Viejo. If warranted, the company could grow to about 60 people in the next year or so.
Some publicly traded homebuilders have slowed their pace of land buying in recent months, according to Webb. But land prices still are above where Webb would like them, he said.
“We’re seeing less competition (for land), but prices are not dropping accordingly,” Webb said.
