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New Home Co. to See $500M+ in Luxe Ranch Sales

The New Home Co. is expecting more than $500 million worth of luxury home sales on the Irvine Ranch, thanks to its latest big land deal with Newport Beach-based Irvine Company.

Aliso Viejo-based New Home Co. this month confirmed it had closed on a deal with Irvine Co. to buy a quartet of upscale home sites in Newport Beach and Irvine for a little more than $250 million.

The deal, which the Business Journal reported in May to be in the works, includes nearly 200 home sites, most notably a pair of projects at the Crystal Cove residential development in Newport Coast totaling nearly 60 lots.

Two Irvine sites are also part of the deal: Cressa, a new project in the community of Portola Springs, and Trevi, an extension of one of New Home Co.’s two high-end Orchard Hills housing projects that’s under way.

The four deals should “generate well in excess of $500 million” in sales for the builder over several years, according to Wayne Stelmar, New Home Co.’s chief investment officer.

That volume would represent a big step up in activity for the company, which went public in early 2014.

It reported about $19.2 million in closed home sales for its wholly owned projects last quarter and had a backlog of nearly $137 million worth of homes sold but not yet completed at the end of June for its wholly owned projects. Those homes have an average $2.1 million sale price.

Five of the 14 communities where New Home Co. is currently selling homes in are in Orange County.

Crystal Cove Projects

The two Crystal Cove projects now on the company’s books—Coral Crest and Coral Canyon—will be the first multihome residential development in the hills above Crystal Cove State Park since the recession.

New Home Co. expects prices in excess of $4 million for the Crystal Cove homes, whose lots were in high demand from competing builders.

The lots New Home Co. bought “represent some of the finest property in the whole United States,” Chief Executive Larry Webb told analysts during the company’s quarterly earning call.

“The Irvine Company picked us over every builder in California,” he said. “We are very optimistic about those projects.”

Regulatory filings show that 195 home lots were sold in the $251.8 million Irvine Co. transaction, or nearly $1.3 million per lot.

Pricey But Popular

The Crystal Cove and Portola Springs projects are scheduled to open for sales early next year, Webb said.

The three projects will add to an active queue of pricey homes New Home Co. has under way in Orange County.

The company is building 39 homes in a project called Fiano in the Pacific Ridge community in the hills of Newport Coast—another Irvine Co. development.

Fiano opened in May, and the first homes should be delivered to buyers near the end of the year.

New Home Co. had signed contracts for 14 of the 39 homes by early August at an average sale price of $3.7 million, not factoring in options for some of the deals, Webb said.

Fiano homes range from about 4,600 square feet to more than 5,300 square feet, with prices initially targeted at $3.3 million to $3.7 million, according to regulatory filings.

New Home Co. also reported selling and completing 25 homes by the end of June at its Meridian condominium project next to Fashion Island in Newport Beach and said that it has sold an additional 36 homes that it hasn’t completed.

The 79-unit project, a venture between the builder and other investors, opened in late 2014 with prices topping $4 million for some units, according to filings with the Securities and Exchange Commission.

The New Home Co. projects are among a handful of luxury home developments that have opened in OC to strong sales this year.

There were 65 sales contracts signed by mid-May at the Hidden Canyon community in Irvine at an average price of $2.7 million, according to officials with Horsham, Pa.-based homebuilder Toll Brothers Inc.

The 250-home project near the intersection of Laguna Canyon Road and Lake Forest Drive opened for sales in early February.

Toll Bros. bought the land for the project last year from Irvine Co. for an undisclosed price.

Hidden Canyon homes range from 4,000 square feet to nearly 5,500 square feet.

There had already been five sales as of June at the Grand Monarch, a 37-home project being built next to the St. Regis Monarch Beach Resort in Dana Point, according to Newport Beach-based William Lyon Homes, which opened the project in mid-May.

Homes there run from 3,370 square feet to 3,996 square feet and should sell for about $2.9 million, according to the builder’s latest quarterly report.

Eastwood on Way

New Home Co., in addition to building luxury homes under its own name, is constructing hundreds of homes at various area Irvine Co. projects under a fee-building arrangement for the master developer’s in-house building arm, Irvine Pacific.

More than 700 Irvine Pacific homes have been built and sold under the arrangement since 2013, and another 1,511 homes were either planned or under construction in June, according to New Home Co.’s latest quarterly report.

The company now acts as Irvine Co.’s “go-to fee builder,” according to Webb, whose company earned about $26.4 million in fee-building revenues last quarter.

Fee-building “continues to be an important part of our business. We started 105 homes in July alone,” Webb told analysts this month.

Next up for the company is a fee-building project for Eastwood Village, a new 300-acre housing project planned just west of Irvine Co.’s Stonegate community.

Plans for the project call for about 1,900 homes, the first of which could be finished next year.

Webb told analysts that his company had “just received contracts” to do six new fee-building projects for the Irvine Co. at Eastwood totaling about 600 homes.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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