New Home Co. has bought land for its first homebuilding project in San Diego, and is also expanding its reach in Orange County through a new project at the La Floresta development in Brea.
The Aliso Viejo-based company—currently the most active homebuilder on the Irvine Ranch through its own projects and fee-building projects for Irvine Pacific LP—recently closed on a pair of land deals that take the 7-year-old operation into new territory.
New Home Co. recently disclosed plans to build 133 homes at the master-planned community of Civita in the Mission Valley area of San Diego.
It will be the company’s first project in San Diego and its first foray into a new market since it bought land in the Phoenix area for a 66-home project late last year.
The soon-to-be-named San Diego development is scheduled to open in the spring, according to Joan Marcus-Colvin, New Home Co.’s. chief marketing officer.
By home count, the Civita project is the largest wholly owned development that New Home Co. has on the books in Southern California, according to the company’s latest quarterly report.
It has 973 homes in the works for its wholly owned projects in Southern California—including developments in OC, Los Angeles County, Ventura County and now San Diego. It also has stakes in more than 2,000 homes at other sites in the region through joint ventures and other partnerships.
The size and pricing for the San Diego homes haven’t been determined, according to the company’s latest financial report.
Homes currently for sale at Civita—part of a first phase built by Irvine-based CalAtlantic Homes—run as large as 2,200 square feet and are priced at about $800,000, according to the project’s website.
The Civita development totals 230 acres and is headed by San Diego-based Sudberry Properties. Plans call for it to hold several thousand homes, plus nearly 900,000 square feet of commercial space, when built out.
Measured Expansion
New Home Co. recently has been “evaluating an increased number of opportunities” for developments in new locations, according to Chief Executive Larry Webb.
The company is expected to proceed with some caution. It will likely expand into roughly one new market per year, Webb told analysts following the company’s latest earnings report. It “continues to be approached by developers to participate in some of the best master-planned communities in the Western United States,” he said.
In addition to Irvine Ranch, New Home Co. has plans to build 54 homes in the next phase of Great Park Neighborhoods and 152 homes at Rancho Mission Viejo, OC’s two other large master-planned communities.
Brea Buy
Orange County, and New Home Co.’s other core California markets, still present “a lot of opportunity to continue to expand,” according to Webb.
That’s the case in Brea, where the company now owns land that will hold 80 homes at the La Floresta development that’s under way near Imperial Highway and Valencia Avenue.
Those homes are 55-plus age-qualified residences, according to Marcus-Colvin. The neighborhood, called Agave, is scheduled for a summer 2017 opening, she said.
New Home Co. bought the land from an affiliate of Atlanta-based Pulte Homes, which initially was expected to build there, according to real estate sources. Terms of the land sale were not immediately disclosed.
The 120-acre La Floresta project will hold about 1,100 homes.
The Brea land buy is the latest involving more affordable home types for New Home Co., which has been building some of the pricier houses in OC in the past few years. Some of its high-end homes along the coast of Newport Beach top the $6 million mark.
The downward shift on price with the projects in markets like Brea and Mission Viejo is by design, according to Webb.
As “we move forward, we’re going to have more projects probably in the $600,000 to $1.2 million range in the future,” he told analysts. “What that will mean is our absorption will go up, our turnover will go up, and it will be a safer longer-term play for us.
“We’ll see that more in 2017 and obviously a bigger part in 2018.”
