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Senior Housing Developers Pay $21M for IBC Site

A Dallas-based developer of senior living properties has bought a 3-acre site along Barranca Parkway in Irvine, and plans to start construction later this year on one of the city’s largest and amenity-heavy residential complexes for older residents.

South Bay Partners Inc. confirmed last week it closed the purchase of 16542 Millikan Ave., a commercial site across the street from the District at Tustin Legacy shopping center. It currently holds a nearly 40-year-old commercial building that’s about 60,000 square feet.

The site, near the intersection of Jamboree Road and Barranca Parkway, was recently used by SmartHome, a seller of home-automation and electronic products. It will be demolished to make way for the new development.

South Bay and financial partner LAMB Properties LLC paid $21 million for the site in mid-December, property records indicate.

It’s one of the larger residential land deals in the Irvine Business Complex over the past years. The existing building has been largely vacant over the last half of 2018. The $7 million per acre price for the property also ranks among the highest noncoastal land deals of 2018 for Orange County.

The new owners plan to build a “highly-amenitized urban community comprised of 230 independent living units, 110 assisted living units and 30 memory-care units with secure underground parking,” South Bay said in a statement last week.

The project is scheduled to be completed by early 2021, and preleasing should start in 2020, the new owners said.

The community will be managed by West Bay Senior Living, a Los Angeles-based company providing management and operational services to senior living communities in Southern California.

The Irvine project is one of two senior housing developments South Bay and LAMB Properties announced for Southern California recently. Last month, they disclosed plans for a similar development in Woodland Hills, a 215-unit project called The Variel.

Changed Plans

The Business Journal first reported plans for the Irvine development last October, when entitlements were being sought for the senior housing project.

The site was previously considered for a traditional housing development, a proposal that didn’t get off the ground.

The Irvine Business Complex is now close to its 15,000-unit cap on residential entitlements. Since the senior housing project will not function “in a manner consistent with a typical residential development,” it’s not subject to that zoning ordinance, according to the project’s backers.

Entitlement work for the project was completed by Irvine-based Starpointe Ventures, whose Tim Strader Jr. brokered the sale with Scott Read from the Newport Beach office of Newmark Knight Frank.

The site was sold by Rossmore Enterprises, a real estate investor based in Aspen, Colo., property records indicate.

The SmartHome building will make way for a two-tower congregate care facility, a product type that typically caters to seniors who need limited or no assistance with daily living activities.

It’s planned for residents 62 and older, according to city filings.

The entire project should run about 424,000 square feet and hold 370 living units.

The eight-story west tower will hold the project’s 230 independent-living quarters. The six-story east tower will hold 110 assisted-living quarters and 30 memory-care rooms.

With its location next to the District, Orange County’s sixth-largest retail center by sales, the development will be “the area’s first senior living community with easy, walkable access to dining, shopping and entertainment,” South Bay said in a statement.

Amenities planned for the complex include an indoor therapy pool and spa, wellness gym, yoga studio, bar and lounge areas, two theaters, art studio and courtyards with barbecue grills, fire pits and seating areas.

Residents “will also enjoy top-quality cuisine prepared by local chefs and served in a choice of dining venues at the community,” South Bay said.

“There is tremendous demand for urban-style rental senior housing in locations where active seniors live,” said Patrick McGonigle, South Bay’s senior vice president of development.

More in the Works

The Irvine project is one of two big senior living developments in the works for sites along Jamboree Road.

About seven miles to the southwest of South Bay’s new development in Newport Beach, Santa Ana’s Nexus Development is planning an upscale senior housing project at the former site of the Orange County Museum of Art, next to Newport Center.

Nexus, developer of Costa Mesa’s high-end senior housing development Vivante on the Coast, a 185-unit project that opened in 2013, plans another project in the mold of Vivante at the Newport Beach site, which it bought last May.

The art museum sold the site for a reported $24 million to finance a new project in Costa Mesa’s arts district.

A high-rise residential tower was once proposed for the Newport Beach site by a prior development group. Nexus plans a project that wouldn’t top 65 feet in height, according to documents related to last year’s sale.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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