Walter Hahn still is bullish on the long-term local housing market, despite a slowdown in sales this year.
Hahn, an economist who does consulting work out of an office in Irvine, said he expects homes to nearly double in value in the next eight years.
Strong job growth and limited homebuilding could help drive the median price of a single-family home to $1.4 million by 2014, he projects in a report on Orange County.
The county “does not have to fear a housing bubble and will not for at least the next 10 years, unless we have a huge loss of jobs such as the 57,000 jobs the county lost in 1991-1993,” according to the report.
Housing prices could go up 10% a year during the next eight years, except for a one-year recession the study factors into the equation in 2010.
The imbalance between demand and homes available is the main reason for the report’s optimistic projections.
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Heritage Corporate Center: Argus leased and renewed 525,000 square feet |
Between now and 2014, 12,000 to 25,000 buyers could seek homes here. But there only is about a seven-year supply of homes on the immediate horizon (assuming 9,000 homes are built annually).
That will have potential buyers bidding up the prices of the relatively few homes available, the report states.
The county’s growth is likely to mirror the evolution of Los Angeles west of downtown, Hahn said. Denser, less expensive houses are seen north of the Costa Mesa (55) Freeway with pockets of pricier homes. More expensive homes will be south of the 55 freeway, according to the report.
Birtcher Anderson Realty LLC, the San Juan Capistrano-based commercial real estate developer and investor, has expanded its search for buildings to buy.
The company recently bought the Potrero Business Center, a three-building, 134,444-square-foot flex-tech and office site in San Francisco.
Up to now, Birtcher Anderson has focused on Southern California, Phoenix and Las Vegas.
The San Francisco deal, for $17 million, is the company’s first buy in Northern California since it started its investment program in 1999.
The 4.5-acre site, in southeast San Francisco, was built in 1986 and is 95% full. Tenants include dialysis operator Davita Inc., Aramark, Inc., Cupertino Electric Inc. and Graybar Electric Co.
Birtcher Anderson said it is looking to buy other office and industrial buildings in Northern California. The company sees improving conditions in the area, said Chief Executive Bob Anderson, who founded the company along with Arthur Birtcher.
Officials also note that the San Francisco area,like OC,is seeing industrial land give way to housing, which should help drive rental rates for the remaining commercial space.
The company has bought more than $170 million of office and industrial buildings in the Western U.S. in the past eight months.
Ken Hulbert of GVA Daum Commercial in Newport Beach represented Birtcher Anderson. Marcella Harrison and Tim Mason of GVA Whitney Cressman in San Francisco represented the seller, Potrero Business Center LLC.
Argus Makes Out Well
When Argus Realty Investors LP bought the 23-building Heritage Corporate Center in Santa Fe Springs for $57.3 million in late 2003, the plan was to hold on to the site for five years.
Expectations at the time were for a 13% yearly return on the office park.
Instead, the San Clemente-based company, which pools together investors on buys, decided to cash out early,and profitably.
The 720,301-square-foot center, spread over 45 acres, recently was bought by Legacy Partners Inc. of Foster City.
The sale price: $84.2 million. That computes to a 57% annualized return in 28 months for the 35 tenant-in-common investors involved in the deal.
The original $19.8 million in investor money returned $2.12 for every dollar, Argus officials said.
The center was 76% full when Argus bought it. Since then, the company has been leasing space, according to Argus Chief Executive Dick Gee.
The company leased two vacant buildings totaling nearly 100,000 square at better than expected rents, Gee said.
In all, Argus signed leases totaling 330,000 square feet and renewed for 195,000 square feet, raising occupancy to 97%.
Argus’ latest buy is in Dallas. It just bought TriWest Plaza, a 17-floor office building that serves as the headquarters for ClubCorp Inc.
The building went for $38 million, or about $100 per square foot. Dallas-based Centennial Real Estate Corp. had owned the 369,052-square-foot plaza. The building is 87% full. Argus is looking to lease up the rest of the space.
