Great Park Neighborhoods currently entitled for 10,500 homes
On the heels of Orange County’s largest reported land deal in several years, land developer FivePoint Holdings LLC (NYSE: FPH) is exploring the potential of seeking additional residential entitlements at Irvine’s Great Park Neighborhoods.
Entitlements for additional residential construction at the 2,100-acre master-planned community—likely a mix of for-sale homes and apartments, and potentially thousands of units—could help Irvine address the shortage of housing, in particular affordable housing, in California, company officials believe.
There’s been a seismic change of late in how the state is addressing a lack of housing, FivePoint Chairman and Chief Executive Emile Haddad told the Business Journal last week.
“The state’s saying, ‘we have a problem; we have a crisis,’” he said. “The narrative has changed in the last two years.”
The state has allocated the shortfall of housing to each of its cities and counties; for Irvine that figure is about 23,000 units, which includes a fair amount of affordable housing, he said.
Across all of California, the housing shortage exceeds 3 million homes, according to the state’s math.
Speaking to analysts following the company’s latest earnings report earlier this month, Haddad said his company knows how it can help the city meet its requirements.
“We know what the needs are, and we are the best positioned to help the city here in Irvine in meeting that, and we have the ability to intensify,” he said.
Irvine’s Great Park Neighborhoods is currently designed to include 10,500 homesites, as well as 4.9 million square feet of commercial space.
As of the end of June, 6,970 homesites, including 709 affordable homesites, have been sold, according to the company.
Haddad told the Business Journal that another 5,000 homes or so could be built on his Irvine-based company’s land at the former El Toro marine base if the city OKs a deal.
“We have more land than entitlements,” a rarity for the area, he said.
Speaking to analysts, Haddad said that in terms of additional development, “I would tell you that the likelihood of us seeing something happen at the Great Park is good.”
The developer and a few current and former members of the Irvine City Council have been at odds in recent years, particularly with regards over the viability and location of a veteran’s cemetery in the city. The heavily politicized cemetery project now appears most likely to move ahead in Anaheim Hills, if at all, following an impasse in Irvine.
Despite those issues, Haddad is striking an optimistic tone, saying “we have a great partnership with the city of Irvine.”
“This isn’t about politics anymore,” he said last week, speaking of the state’s housing crisis.
Haddad said his firm and Irvine Co. have had “a lot” of discussions with the city over how to move forward on seeking new entitlements.
“If you’re asking me, ‘do I feel good about that happening?’ The answer is ‘yes,’” he said.
Mega Land Deal
Talk of additional development in Irvine comes just after FivePoint completed one of its largest-ever land deals at the Great Park Neighborhoods.
The company recently closed on the sale of 774 homesites on 58 acres of land at the Great Park Neighborhoods, for $328.2 million.
The sale works out to nearly $5.7 million per acre, and $424,000 per homesite. In the company’s last big sale to homebuilders in 2019, land went for around $5.3 million an acre.
The latest batch of homes could top $800 million in total sales, given many homes at FivePoint’s existing communities routinely sell for more than $1 million.
A handful of builders, including Lennar, have been selected for the latest phase of development at the master-planned community.
The company’s seen an already rapid pace of home sales in Irvine over the course of the pandemic kick into overdrive of late.
Through July of this year, the net home sales at the Great Park have totaled 516 homes out of an average of 14 product types, officials said. That compared to 291 net sales out of an average of 20 products for the same period last year.
Shares in the developer this month reached their highest point since early 2020, giving the company a valuation of over $1.2 billion.