COMMERCIAL
It’s good to be right, even if only half right,so far.
Los Angeles-based Maguire Properties Inc. announced last month it leased 179,000 square feet to New Century Financial Corp. for space at Park Place in Irvine.
Back in October, I wrote that New Century was set to lease more than 400,000 square feet at the sprawling commercial campus at the corner of Michelson Drive and Jamboree Road,the largest office lease in recent memory.
I still expect to be right about the rest of the space. Maguire said in a release that it’s “in lease negotiations with New Century Financial for additional office space in a new building to be constructed at Park Place for a targeted delivery in the first quarter of 2007.”
Maguire has said it plans to build a tower on its Park Place land of some 20 stories and 600,000 square feet. New Century could be taking a big chunk of that.
Subprime lender New Century is based in Irvine but leases space at several spots in Orange County. It’s looking to consolidate operations at Park Place.
Maguire said it signed three leases with New Century for a total of 179,000 square feet.
The company will be taking space in different buildings, including 3121 Michelson,that’s the high-tech, European-style building that has been mostly vacant since it was finished in late 2002. The six-story building’s main tenant now is Irvine-based Quick Loan Funding Inc.
New Century is expected to start moving in April, Maguire said.
It’s been a bumpy few weeks for homebuilder stocks.
Shares of Newport Beach-based William Lyon Homes didn’t take a hit when the homebuilder announced March 1 that it expects business to drop 10% to 15% this year as a result of delays due to wet weather and a decline in orders for new homes.
The stock dipped a bit in trading the day of the announcement but regained lost ground before the market closed. It traded in the $88 to $90 range.
But last week, homebuilder stocks dipped on Ryland Group Inc.’s weaker-than-expected first quarter forecast and inflation fears. The company’s shares closed at $82 on Thursday.
I’m no stock expert, but I assume the stock’s initial buoyancy means investors had anticipated some decline this year. In addition, William Lyon is a smaller company whose stock mostly is held by Gen. William Lyon, the chief executive, as well as a few large investment companies.
In other words, trading volume typically is light for the stock. And the company is buying back some outstanding shares.
Still, out of curiosity I listened to the company’s earnings conference call to hear what questions analysts would lob at William Lyon executives. That was a disappointment. The call was brief and polite.
I didn’t hear a single question about William Lyon’s stunning (at least to me) announcement.
One analyst, I couldn’t make out his name, asked if the company is considering paying a dividend, especially since dividend tax rates have declined under President Bush.
The company has no plans to start paying dividends, an executive said.
As for a larger homegrown homebuilder, Irvine-based Standard Pacific Corp.’s stock had a tough week through Thursday, falling from above $80 to about $74.
The company hasn’t dropped any bombs lately, but I keep thinking the prospect of higher mortgage rates in the future should put downward pressure on the stock. Of course, I’ve been thinking that for a year or more.
To maintain its solid growth rate, Standard Pacific likely will use a strategy favored by many others: acquisitions.
Earlier this month, Standard Pacific said it was buying the Bakersfield operations of Probuilt Homes, scooping up 1,000 lots for homes in the area. The price was not disclosed.
Amid a long bull-run for housing, builders have been buying lots further and further away from the coast. The western edges of Riverside and San Bernardino counties were the first growth areas. Now they are much more crowded and almost as pricey as OC.
And early last week the company said it was expanding into the San Antonio market.
Sell Out
San Juan Capistrano-based Picerne Group last month sold three Ontario apartment complexes to Los Angeles-based RPK Development Corp., ending Picerne’s bumpy management of the income-restricted units.
RPK picked up 333 apartments, including 266 units for low-income seniors and families, according to a report on DailyBulletin.com.
The city previously bought Picerne’s three other Ontario apartment projects in a settlement over the company’s management of the units.
Residents had complained of cockroaches and mold, as well as other problems. Most complaints came from two projects, Parc Vista and Terrace View, according to the city.
Under the settlement, the three complexes Picerne kept,and later sold to RPK,had to be renovated.
The relationship between Picerne and the city began in 1995 when Ontario issued $23 million in bonds for the developer to buy five apartment projects and renovate them.
The company agreed to use rental income to pay the bonds. The city now wants to sell at least one of the complexes.
