A vacant parcel of land in Santa Ana that was eyed as a site for a high-rise condominium tower before a shift to plans for midrise apartments has been sold to a Beverly Hills-based developer.
Legado Cos., a developer of apartment complexes and other real estate projects, recently closed on the purchase of a 3.1-acre site between MacArthur Boulevard and First American Way, near the Costa Mesa (55) Freeway.
The Santa Ana development site, which had been operating out of court-overseen receivership, sold for nearly $17.3 million, or a little more than $5.5 million per acre.
It’s the only Orange County property that Legado Cos. is known to own.
The company said it has built more than 12,000 residences and 400,000 square feet of retail and entertainment space in Southern California. Legado currently has projects under way in Encino and Culver City, according to its website.
The Santa Ana property, in the South Coast Metro area of the city, is expected to move ahead as an apartment development, although a time frame for construction moving ahead has not been disclosed.
Development rights still need to be transferred to Legado from the city, a process that could take a few months, according to Javier Rivera, vice president for the Los Angeles office of Jones Lang LaSalle.
Rivera and colleague Joe Leon, managing director for the Irvine office of Jones Lang LaSalle, marketed the property, which was sold by David Wald as the State Court Receiver for the property.
David Pasternak of Century City-based Pasternak, Pasternak & Patton also represented the receiver in the sale.
The site, as now envisioned, is slated to hold The Met at South Coast, a 271-unit apartment complex whose three buildings would top out at five stories each.
It’s expected that Legado’s development will largely follow the apartment plans drawn up for The Met. Other developers that looked at buying the site considered revisiting the condominium plan, according to Rivera.
The property, at 200 E. First American Way, has had a series of owners and development plans over the past eight years.
The land was previously slated to hold a high-rise project initially called Geneva Commons, later renamed Promenade Pointe, which was to be built by Santa Ana-based Coastal Rim Properties Inc.
The project—initially expected to include condominiums spread over an eight-story, 84-unit building and an 18-story tower with 194 units—was approved by the city in 2005.
Coastal Rim estimated the project would have a value of $246 million when completed. The developer never moved ahead with construction, due to deteriorating market conditions.
The site changed hands for a reported $6.1 million in a lender-driven deal in 2011.
The buyer group in that deal, VDC at the Met LLC, included Los Angeles-based Vineyards Development Corp., as well as Bisno Development Co., another Los Angeles-based developer that built Santa Ana’s mixed-use City Place project.
The VDC at the Met entity got the site re-entitled for apartments, but disagreements among the backers of the project—presumably related to debt issues—led the owners to place the project in receivership late last year.
Another developer—Richardson, Texas-based Genesis Real Estate Group—had been tapped to purchase the site out of receivership for $14.8 million earlier this year, but that deal didn’t go through.
Legado “paid a market premium” for the site, due to Orange County’s strong apartment market, said Riviera.
“The market is in a strong place now,” he said.
OC apartment complexes now have an occupancy rate in excess of 95%, according to brokerage data.
The property “is an entitled development site that should be hitting the next multifamily cycle with perfect” timing, said Jones Lang LaSalle’s Leon.
Newport Beach-based apartment owner and developer Lyon Communities is nearing completion of The Marke, a four-story, 300-apartment complex just a block from the site of The Met at South Coast. Across the street is the two-building, 25-story Essex Skyline towers, the tallest residential project in Orange County.
