The biggest gauge of Orange County’s demand for high-rise living might be taking place at its tallest project.
Nexus Cos. is well under way with construction at Skyline at MacArthur Place, a $350 million condominium project it’s building in its hometown of Santa Ana. But the steel is moving faster than the sales.
The twin 25-story towers, at MacArthur Boulevard and the Costa Mesa (55) Freeway, stand to be the tallest condos in the John Wayne Airport area. Right now, steel has gone up to the 18th floors.
Nexus broke ground on the buildings in June of last year. The first is expected to finish in about a year, with the second building wrapping up two months after that.
Sales at the project,like most OC housing projects,aren’t moving as quickly as developers would like. The two buildings are about a third sold.
The sluggish pace of sales at Skyline is roughly on par with those seen at the three other condo towers being built next to John Wayne Airport in Irvine. Speculative investors and out-of-town buyers, who drove sales on much of the first wave of the area’s condos, have long since left the market.
“It’s definitely a challenging market, and a changing market,” said Cory Alder, Nexus president.
“There were some things (in the market) we expected, and some things we didn’t expect,” with the recent credit squeeze falling in the latter category, Alder said.
August, in particular, was a slow sales month as news of the deteriorating mortgage market kept buyers away, he said.
But the company isn’t pressing the panic button. Alder notes that visitors to the project’s sales office are steady, and that the quality of buyers it is seeing remains strong.
Nexus also is busy with other types of developments. It’s moving forward with a $250 million Hard Rock hotel with nearly 500 rooms in Palm Springs. And its venture with Bacchus Development Corp. building small for-sale office projects in the Irvine Spectrum,through the Brenexus name,is proving a savvy move.
About 80% of the Skyline buyers to date are locals who already live within seven or so miles of the towers, according to Alder. They range from young buyers in their mid-20s to empty-nesters in their 70s.
Residents won’t have to travel far if they want to take up any complaints with the owners. Both Alder and Nexus Chief Executive Curt Olsen have bought units at the complex.
Nexus took a different sales strategy for Skyline than other high-rise developers. Sales didn’t start in earnest for the project until early this year, after construction was well under way.
It’s unlikely a developer looking at building a tower now could get construction financing unless its project was close to 50% presold, according to officials with Phoenix-based Opus West Corp.
Opus West and partner Geoffrey H. Edmunds California Inc. of Arizona have started construction on their third and final condo tower along Jamboree Road. It is set to be completed in about 14 months, and is about 50% sold out.
Other planned developments are moving along at a slower pace. Across the street from the Skyline project, a sales office opened earlier this month for Promenade Pointe, a planned 18-story condo building. A time frame for that project still is unclear.
Early this year, Canada’s Bosa Development Corp. was pushing ahead with plans for more condos at Irvine’s Park Place. The sales office for those towers has since closed, with the project on hiatus.
Nexus’ lack of presales is a risky strategy, market watchers say. On the upside, the delay in sales could ultimately provide the developer with a higher profit margin, if prices hold up.
When Nexus announced the project last year, it said homes would run from the high $500,000s to about $1.5 million. Now, prices for the remaining top-end units at the project are being quoted closer to $2 million.
Nexus said last week it is offering special pricing incentives and financing for the condos.
