Irvine Company is in discussions with the city of Tustin to build apartments on that city’s long-stalled Tustin Legacy project.
The Newport Beach-based real estate developer and investor—currently Orange County’s most active apartment builder—tops five companies on a short list of potential developers for a pair of apartment projects proposed for part of the 820-acre former Marine helicopter base.
City plans call for nearly 750 apartments along a soon-to-be extended Tustin Ranch Road.
One of the projects could hold up to 211 apartments, while the other project could see as many as 533. Both projects would include apartments set aside for renters with low and moderate incomes.
The apartments would be among the first new projects to go up at Tustin Legacy, which has seen development work put on hold over the past several years amid the stalled real estate market.
Tustin’s next move is to get detailed proposals from the five potential developers on the apartment plans. The city’s current timetable calls for them to be built in late 2013 or early 2014.
Other developers in the running for the apartment projects include Bridge Housing Corp. and BRE Properties, both of San Francisco; Sacramento-based St. Anton Partner LLC; and a unit of Englewood, Colo.-based Archstone.
A total of 11 companies made initial inquiries in response to Tustin’s call for prospective developers for the two apartment projects, according to city documents.
Irvine Co. was the highest-rated developer expressing interest in the two projects, according to the city’s ranking of the 11 companies based on track record, financial strength and other factors.
The city is amid a similar selection process for land at Tustin Legacy that could hold a for-sale housing development and several hundred thousand square feet of commercial space.
Most of that work, which could start in a little more than two years, also would be built alongside the Tustin Ranch Road extension that’s slated to run through the heart of the project, parallel to Jamboree Road and Red Hill Avenue.
City documents show that 12 homebuilders have expressed interest in the for-sale residential development, and there’s also been interest from an unspecified number of commercial developers.
Tustin hadn’t winnowed down the list of candidates for those projects to three firms by the time the Business Journal had gone to press, according to city filings.
After Shea
The city of Tustin said earlier this year it planned to market for sale chunks of Tustin Legacy to developers beginning this summer.
More than 110 acres of the land are expected be sold in four or more pieces in the next year or so.
The city’s decision to split up the land into smaller parcels came after it ended its partnership with the project’s former master development partner, Aliso Viejo-based Shea Properties Inc., last year.
The potential involvement of Irvine Co.—Orange County’s dominant real estate company—could provide a much-needed jolt to Tustin Legacy. The project is expected to hold about 2,100 homes and close to 6.7 million square feet of commercial space when completely built out.
Irvine Co. already owns about 2,200 apartments in Tustin, part of a multi-family portfolio that totals more than 43,000 units, much of it in OC.
A conservative estimate would value Irvine Co.’s apartment portfolio close to $11 billion.
Apartment values have likely seen the biggest boost in values of any commercial property type in the area over the past year-and-a-half, thanks to favorable demographics and a slowdown in home buying.
The Tustin project is just one of several apartment developments undertaken or proposed by Irvine Co. lately.
By the Business Journal’s count, Irvine Co. has close to 6,000 apartments under construction or in some stage of discussion about building. Those projects are on land it owns and other locations across Orange County.
Spectrum Project
In and around the Irvine Spectrum, the company is working on the second phase of its nearly 1,450-apartment Park complex, which is slated to open this winter near the company’s 20 and 40 Pacifica office towers.
On the other side of the San Diego (I-405) Freeway, Irvine Co. recently got the city’s approval to go ahead with a 1,750-apartment project near the site of the soon-to-close Wild Rivers Waterpark.
Near the corner of Irvine Center Drive and Alton Parkway, the company’s filed a request with the city to allow more than 1,200 apartments to be built on an empty parcel of Irvine Spectrum land that previously was zoned to hold about 1.9 million square feet of commercial space.
That land was expected to hold another high-rise office prior to the last downturn, according to real estate sources.
Elsewhere in OC, the Irvine Co.’s recently acquired Pacific Arts Plaza office complex in Costa Mesa has entitlements for additional uses that could include apartments. No time frame for any construction at the complex has been announced.
Irvine Co. is also said to be nearing a land deal for another site in Irvine near John Wayne Airport that would likely hold apartments, according to real estate sources.
