RESIDENTIAL
The next generation of Orange County homes is likely to include more density, have a greater emphasis on quality locations and may even be less expensive than the projects you see being built now, county planning directors were told late last month.
Local officials from Dallas-based Centex Corp. and Newport Beach’s John Laing Homes spoke at the annual Planning Officials Forum of Orange County, held in Costa Mesa.
It’s a new ballgame for the building industry after the recent downturn in the housing market, the execs said. That change starts with pricing for area homes.
“We have to find a price” that grabs buyers’ attention, said Richard Douglass, Centex division president for Southern California.
Factoring in larger concessions of late, homebuilders have seen the median price of a newly built home drop by more than $100,000 in the past two years, to about $630,000, Douglass said.
The lower prices should help counteract the higher interest rates and tougher lending standards seen now, compared to the market’s peak of 2005. As of June, you needed $700 more per month in income just to qualify for a $300,000 loan than you did two years ago, he said.
During the next few years, expect higher-density projects to grab the most attention, said Daniel Flynn, vice president of acquisitions for John Laing. Instead of 10 or so homes per acre, projects with 15 or even 17 homes per acre are more likely, he said.
That will make the projects cost-effective for developers, while getting the prices points for buyers to a more-affordable level, Flynn said.
Homebuilders are reconfiguring home layouts, driveways and common areas to fit that type of space requirement.
“You’re not going to get a big backyard, but you will get some private outdoor space,” Flynn said.
For condominium towers and other high-end developments, location will be key going forward, Flynn said. “The market corrected for mistakes (a few years ago). That isn’t happening now,” he said.
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Projects near the retail and arts area of South Coast Plaza should sell, as will Makar Properties LLC’s Pacific City development in Huntington Beach. It’s still a question as to whether the commercial area around Irvine will support sales, Flynn said.
Madison Park, one of the largest apartment complexes in OC, is on the market.
The 768-unit complex, located on West Broadway in Anaheim, has been listed for $170 million, or about $221,000 per unit.
Pacific Property Co., a Palo Alto-based privately owned apartment investor, is selling the buildings.
The 12-building complex, which totals about 615,528 square feet, was assessed at $104 million last year. The current owner put in about $14 million of upgrades last year.
The listing brokers for the property say it’s the largest apartment complex in Southern California to go to market since 2004. It’s about double the size of any OC individual apartment sale in two years.
Average monthly rents at Madison Park run from about $1,000 to $1,700 for two-bedroom units.
Pacific Property Co. has been an active investor in OC this year. In January, it sold the Grove Apartments, a 245-unit complex in Garden Grove, to Redwood City-based Matteson Cos. for $46 million.
In April, it paid $31.6 million for Newport Glen, a Costa Mesa complex with 136 apartments.
Gregory Harris from Marcus & Millichap Real Estate Services is the lead broker for the property.
Bixby in Arizona
Irvine’s Bixby Land Co. has bought its third Phoenix-area property, a 78,672-square-foot corporate headquarter warehouse facility in Glendale, Ariz.
This was a sale-leaseback transaction; Bixby Land paid $10 million and then leased it back to a furniture company. Bixby has bought nearly 300,000 square feet of industrial property within the Phoenix area this year, totaling $46 million.
The warehouse is occupied by a company that provides furniture for schools in the state. The tenant has a seven-year lease remaining.
Medical Office Listing
Colliers International’s John Wadsworth has grabbed the listing assignment for the MacArthur Medical Campus, a new, for-sale property in Irvine.
The under-development property, due to be finished early next year, is a 68,274-square-foot complex at the corner of MacArthur Boulevard and Red Hill Avenue. Suites will run from about 1,387 square feet to as large as 34,138 square feet.
The two buildings are being constructed by a unit of Costa Mesa’s Net Development Co. The developer bought the property for $17 million.
