RESIDENTIAL
Walnut-based Shea Homes, the country’s largest family-owned builder, isn’t expecting a turnaround in the housing market any time soon.
“At the end of 2009, beginning of 2010, you’re going to see some stabilization or bottoming out of volume of sales and construction starts,” said Bert Selva, Shea Homes’ president and chief executive. “We’ll hit (bottom) next year.”
Selva, a Newport Beach resident, gave his thoughts on the state of the housing market last month at an investor conference sponsored by Los Angeles-based City National Bank, part of City National Corp.
Shea Homes and sister company, Shea Properties of Aliso Viejo,both part of Walnut-based J.F. Shea Co.,have plans to develop an 820-acre portion of Tustin’s former Marine base, where 2,100 homes and 6.7 million square feet of commercial space are slated to go up.
Offices, hotels and shops at Tustin’s Legacy Park are slated to be built first, with development starting on homes once Orange County’s housing market shows signs of improving, officials have said.
Shea Homes should be in a strong enough financial position to move ahead with its portion of Legacy Park. Selva told the conference that Shea didn’t overextend itself as much as some other builders during the past few years. During the boom, a number of companies bought overpriced land expecting real estate to keep appreciating at the break-neck pace of 10% every year, according to Selva. But Shea couldn’t justify those kinds of deals, he said.
“A lot of deals we couldn’t do; we couldn’t make the deals pencil,” Selva said.
Like other builders, Shea Homes has made its share of moves to weather the downturn, including reducing inventory and construction starts and discounting homes.
It has also cut about 50% of its staff from the peak of the market.
The cuts “are well beyond the fat, we’re into the bone,” Selva said.
Shea Homes reported having about 140 workers in OC earlier this year, which was down from 220 two years earlier.
COMMERCIAL
Irvine’s Sperry Van Ness is looking to pick up brokers leaving companies because of the slow pace of leasing and sales.
Late last month I met with Bob Osbrink, who recently was named president of Sperry Van Ness’ Southern California, Arizona and Oregon offices.
Those offices were acquired by Portland, Ore.-based Guardian Management LLC in August.
Among other tasks, Osbrink says he’s working to beef up the number of brokers for Guardian’s eight Sperry Van Ness offices, of which Irvine is the largest.
Those offices had about 190 brokers at the time of the acquisition; Osbrink, formerly an executive at Grubb & Ellis Co., said he’d like to have as many as 230 brokers by year’s end.
“People are calling us,” to inquire about positions, he said.
Sperry Van Ness’ strengths are in the apartment and retail sectors, but the company is looking to boost its presence in other markets, Osbrink said.
OC, along with New York, is one of the country’s best sources of brokers, Osbrink said. That’s largely due to the area’s brokerage community having grown up alongside much of the rapid development in the area, he said.
MSC Sublease
Santa Ana-based MSC.Software Corp. is making more of its headquarters at 2 MacArthur Place available for sublease.
The company leases 205,320 square feet of space at the office tower, which borders the campus of First American Corp. The lease runs through 2013.
Earlier this year, the company subleased about 69,400 square feet of that space at the nine-floor tower and said an additional 51,400 square feet was also available. Now, the total amount of available sublease space is up to 134,000 square feet, at monthly rents of $1.95 per square foot, according to CoStar Group Inc.
The Irvine office of brokerage Newmark Knight Frank is handling the listing.
Oakley Office Sale
One of Foothill Ranch-based Oakley Inc.’s offices is on the market.
A 36,800-square-foot building at 25361 Commercentre Drive, which houses a finance division of Oakley, is being listed for sale by the Newport Beach office of brokerage NAI Capital.
The lease runs through 2016.
The seller, a private investor from Fullerton, is asking $11.9 million for the property, or about $325 per square foot. The asking price reflects a 6.3% capitalization rate.
