CT Buys South Bay Complex; Apartment Deals up in 2000
At Vision 2001, a real estate confab in Irvine earlier this month, Orange County real estate honchos networked, shared gossip about possible deals and listened to speakers report on the past and debate about the future of the market.
The comments were familiar to readers of this column: OC enjoyed yet another blissful year in 2000 and, while few predict doom and gloom this year, public opinion remains “quietly optimistic,” according to Richard Sim, The Irvine Company’s chairman, Investment Properties Group.
After kicking off the day with a speech on “Leadership in the New Economy,” Sim met briefly for a private talk in which he elaborated on his thoughts about OC’s future.
Sim, the driving force behind the Irvine Spectrum, said OC’s persistence on “planning” for the future leaves it in good shape. It’s a place with diverse business clusters, and despite technology’s leading role, OC isn’t overly dependent on any one industry, he said.
OC’s ability to draw divergent companies,from biomedical to telecommunications to automotive,keeps the real estate market vibrant, according to Sim.
But that success also points out a glaring weakness: the housing shortage. Sim said job creation continues to outstrip new homes. In the past five years, 211,000 jobs were created locally.
“Based on that figure, we should have provided nearly 147,000 new housing units to accommodate these workers,” Sim said. “We only provided 44,000 new units in that time frame. We fell short by more than 103,000 units.”
And it’s only going to get worse. According to Sim’s figures, OC’s population will reach 3 million by 2005, up from the current 2.8 million.
“We need to talk to local elected officials to approve in-fill density,” Sim said.
Currently, only 28% of OC households can afford to purchase a median-priced, existing home, according to research conducted by Mark Baldassare, a professor at the University of California, Irvine.
COMMERCIAL
CT Realty Corp. acquired a 56,500-square-foot industrial complex in El Segundo. The Newport Beach-based real estate company paid $4 million in the deal and intends to invest an additional $5.2 million to redevelop the property into a corporate office facility known as Pacific Technology Center.
A 44,500-square-foot building and several smaller ones totaling 12,000 square feet make up the property. Current occupant Vacco Industries, a unit of ESCO Electronics Corp., plans to vacate March 31, when its lease expires.
The redevelopment project begins April 1 and plans include a single-story, 50,500-square-foot building, with surface-level parking taking the place of the rear structures, which will be removed from the property.
“This property is a good example of the type of infill, adaptive re-use project we are actively pursuing,” said Robert M. Campbell, president of CT Realty. “The new office design is highly flexible and can accommodate a variety of applications.”
Possible uses include pure office to light manufacturing to technology and office or laboratory, according to Campbell.
CT Realty purchased the property from Eaton Corp., the original occupant of the buildings. Bradford Vickery of Daum Commercial Real Estate’s South Bay office represented they buyer and seller.
Hedley Construction and Management Inc. of Costa Mesa is set to handle the general contracting and Carter Group Architects Inc. of San Clemente is being tapped to design the project.
RESIDENTIAL
This month, the National Multi Housing Council released its latest figures on the 50 largest apartment owners and 50 largest apartment managers in the U.S. Orange County placed a company in each category.
WNC & Associates, Inc., Costa Mesa, earned the 33rd spot in the ownership category with 26,733 units. In the management category, Western National Property Management moved up from No. 21 in 2000 to No. 17. The Irvine-based company manages 42,005 units.
Nationally, the apartment industry saw solid growth. The 50 largest apartment owners grew their holdings 2.9 percent in 2000, an increase of 2.6 million units. The top 50 apartment managers experienced a nominal change, with 2.4 million units under their direction.
“This year’s rankings provide further evidence of the strong occupancy, solid earnings growth and moderate new construction that have characterized the apartment sector over the last four years,” said Mark Obrinsky, the council’s chief economist. “Among apartment management firms, consolidation trends took a breather last year.”
However, with individual owners and smaller firms continuing to own the majority of the nation’s units, the council projects further consolidation, with the top 50 firms adding the smaller companies to their portfolios.
