Last week I wrote about the next high-rise condominium planned for Canada’s Bosa Development Corp. at Park Place in Irvine. Bosa Development hopes to break ground on a third Park Place high-rise, with about 170 condos, in about six months.
Nat Bosa, president of the Vancouver, British Columbia-based developer, was in town earlier this month to show off his first two towers, and stir up interest for the next one. Bosa,always a candid interview,had plenty to say about the project and the housing market.
There’ll be one big difference with his new tower: price.
He’ll have to charge $100 to $150 per square foot more for the next tower to cover rising construction costs, Bosa said. That likely will put the average starting price for a condo around $800,000 or higher. The ultramodern homes at the first two towers, known as the Marquee, were about 1,200 square feet and sold for around $550 per square foot or in the high $600,000 range.
The higher price shouldn’t necessarily scare away buyers, said Bosa, who thinks the market is ready to kick back into life pretty soon.
“I really feel that the time to buy is in the next six months,” he said.
One location Bosa won’t be building homes is a land parcel adjacent to the Santa Fe depot in downtown San Diego. He sold the land to The Irvine Company earlier this year. The Newport Beach company plans an office tower in the 35-story range there.
Bosa said he sold the land only after city officials expressed skepticism about another downtown condo building in a market that has seen a glut of projects lately. He thought the project was a great one.
“I sold (it) to make the city happy,” Bosa said. “I wouldn’t have sold the site for $100 million if I thought I could have built condos there. (The Irvine Co.) knows how to make offices better than us.”
As to the herd mentality of developers, Bosa had this quip: “We’re not pigs. We’re hogs.”
Shady Sales
Another story follow-up.
In last week’s residential real estate special report, I noted that more than 40 homes at the posh, 400-home Shady Canyon development in Irvine were up for sale, with only two having offers.
Brokers said that percentage of new and resale homes still on the market was extremely high for a project such as Shady Canyon, and a telling sign of the slowing local housing market.
The Irvine Co., which oversees the development, doesn’t dispute that figure, but said it wasn’t cause for alarm.
“It’s not something that’s unusual to the custom home community,” said John Christensen, spokesman for the Irvine Co.
Custom homebuilders at projects such as Shady Canyon prefer to build speculative homes, which often take longer to sell, he said.
For a custom-home project such as Shady Canyon, there is typically a 3% to 10% transition annually in ownership, putting the current situation there at the high end of the norm.
The high turnover seen now is usually due to life changes,marriage, divorces, children coming or going, or job relocations,and not a sign of the current market, Christensen said.
Also worth noting: The resale prices at Shady Canyon are far higher than the norm seen in the county.
The first batch of homes there from the Irvine division of Britain’s Taylor Wood-row PLC, a 15-home project called the Villas at Shady Canyon, initially sold in the mid-$1 million range. They now are listed at near $4 million, Christensen said.
Costa Mesa-based Guthrie Development Co. isn’t seeing any slowdown in demand for smaller, for-sale industrial products here.
The developer said it just sold out one of its newest projects, Guthrie Orange Business Center, a 15-building, 86,372-square-foot industrial park in Orange.
The buildings, which range from 4,400 to 7,650 square feet, sold for a combined $15 million. The project was completed in November.
The development “experienced a substantial amount of demand from light distribution and manufacturing firms due to its great location next to four Orange County freeways,” said Robert Guthrie, president of the company. The project is near the intersection of Meats Avenue and Glassell Street, within three miles of the 57, 55, 22 and 5 freeways.
Mitch Zehner, Louis Tomaselli and Mike Boomer of Voit Commercial Brokerage LP’s Anaheim office represented the seller, as well as 12 of the 15 buyers.
