A common refrain from national homebuilders during the industry’s recent slump has been “wait till summer.”
Now, it appears that earlier projections of a midyear turnaround are looking a little iffy. The latest sign of a longer national slump came from Lennar Corp. Chief Executive Stuart Miller, whose Miami-based company’s operations are largely run out of Aliso Viejo.
Miller noted late last month that the “typically stronger spring selling season has not yet materialized.”
Closer to home, Lennar’s mood is more optimistic. But it is still a wait-and-see sales environment for some of the larger local projects on tap for Orange County’s biggest homebuilder.
I got a recent tour of Central Park West, the company’s 43-acre project just off the San Diego (I-405) Freeway and Jamboree Road in Irvine, from Rich Knowland, regional vice president for Lennar.
Seen from the inside, it’s a bigger development than you’d expect. Besides the project’s center, an upscale recreation and meeting area, what struck me most about the project was the lack of noise coming from the freeway.
Construction for the 1,380-home urban development has begun in earnest. Market conditions aren’t altering the timeline for the completion of the housing component of the project, Knowland said.
The only delay so far has been with a 90,000-square-foot office planned at the corner of Jamboree and Michelson Drive. Drug maker Allergan Inc., which has its campus a few blocks away, has voiced some concerns, which is slowing down the final approval process for the office.
The company is tentatively planning to ramp up home sales at the site in the next two months, Knowland said. The ultimate timing for the sales “will largely depend on how the market shakes out,” he said.
The first home models should be completed by year’s end. Lennar expects about 30% of Central Park West sales to be from first-time homebuyers.
At the two Astoria towers being built at the back corner of the development, sales are slow, but interest is steady, he said. There have been about 30 condos sold at the towers, which will have a total of 240 condos.
Lennar is using a high-tech tool for the first batch of homes it will be selling on the site. It is giving prospective buyers a virtual tour of the different floor plans available at its nearby sales office, with high-definition graphics worthy of a video game. The company plans to roll out a similar program for its Platinum Triangle and Great Park projects, Knowland said.
G REIT Inc., part of Santa Ana-based Triple Net Properties LLC, just sold off one of its better-known local properties.
It sold Long Beach’s One World Trade Center for $148.9 million. A division of Foster City-based Legacy Partners Commercial Inc. was the buyer.
G REIT bought One World Trade Center in late 2003 for $113.6 million. The property, built in 1989, is 27 stories and runs 573,000 square feet. The building is 88% leased. Tenants include federal agencies, law firms and professional services firms.
Triple Net acts as an adviser to G REIT, which is in the process of a shareholder-approved liquidation plan. It has sold off 12 properties since the start of 2006.
Highpoint Office Deal
Highpoint Capital LLC, a Venice-based firm founded about a year ago, bought a 77,165-square-foot office building in Costa Mesa.
The price for 3187 Red Hill Ave. was $15.8 million. Core Realty Holdings LLC of Newport Beach owned the building.
Brian Garbutt of Lee & Associates Commercial Real Estate Services Inc.’s Newport Beach-based office represented Highpoint in its purchase.
Highpoint has focused to date on commercial deals in California, with another $20 million of deals recently in Pacific Palisades and Rancho Mirage. It’s actively pursuing opportunities in Texas, Colorado, Nevada and Washington, according to Jeffrey Seltzer, principal for the company.
Restaurant Package
A package of four restaurants in Garden Grove just changed hands for $11.5 million.
Millbrae Square Co. bought the restaurants, which include a Joe’s Crab Shack, Red Robin, Outback Steakhouse and Oggi’s Pizza. They’re near the intersection of Chapman Avenue and Harbor Boulevard. The restaurants sold at a 5.4% capitalization rate,the rate of return in the first year of ownership.
McWhinney Enterprises was the seller. Phil Voorhees, Patrick Toomey, Holly Hamilton and Pat Scruggs from CB Richard Ellis Group Inc.’s Newport Beach office represented the seller. Tom Fazekas of Fazekas Retail Group represented the buyer.
Mullin Takes to Air
Stan Mullin, senior vice president in the Newport Beach office of Grubb & Ellis Co., was named president of the Air Commercial Real Estate Association.
Air is a nonprofit of brokers serving the Los Angeles Metro area. It’s comprised of more than 2,000 brokers in 350 companies.
Mullin, is also president for the Society of Industrial and Office Realtors.
