Irvine-based homebuilder Melia Homes is looking to tear down an older apartment complex in the Westcliff area of Newport Beach to make way for one of the largest for-sale housing developments that part of the city has seen in years.
The privately held builder last week reached a deal with Newport Beach-based Irvine Co. to buy the developer’s Mariner Square apartment complex on Irvine Boulevard and build a 92-unit home community in its place.
Early-stage plans were recently filed with the city of Newport Beach for the proposed project.
Any construction work related to the residential project appears to be more than a year away.
“We intend to explore many possible improvements, but we would not begin any significant modifications, at the earliest, until 2019,” Melia Homes President B.J. Delzer said in a statement.
“If we end up pursuing significant reinvestment, we will keep residents well-informed as the plans materialize,” he said.
The housing project likely requires a review by the California Coastal Commission—an often-lengthy process—city filings note. An environmental impact report will likely not be required, city officials said last week.
The sale of the apartment complex was expected to be completed around the time the Business Journal went to press last week. A sales price wasn’t disclosed.
Irvine Co., the largest owner of rental properties in Orange County, with more than 41,000 units here, has already sold a handful of other older rental complexes it owns in the region over the past year. It’s raised more than $230 million from those sales, according to property records.
“Long-term ownership remains one of our guiding principles; however, we have, for strategic reasons, decided to sell Mariner Square, which represents a very small fraction of our portfolio of apartment communities,” an Irvine Co. spokesperson said in a statement.
The landlord was actively marketing vacant units for rent at Mariner Square as of last week.
The complex, built in 1968, is on the Newport Beach side of Irvine Boulevard, which divides the city from Eastside Costa Mesa. It’s next to Mariners Elementary School.
It also sits next to Irvine Co.’s Westcliff Plaza shopping center, which is at the intersection of Irvine Boulevard and Westcliff Drive.
That stretch of Westcliff Drive is home to a number of retail and commercial properties, including Burnham Ward Properties’ recently redeveloped Castaway Commons retail and medical office center.
The Irvine Co. apartment site, which the landlord describes as a “boutique townhome community,” currently holds 114 rental units on its roughly five-acre site. One-bedroom apartments there have rents starting at about $2,100 per month, while a few two-bedroom units currently top $4,000 per month, according to Irvine Co.’s website.
Mariner Square’s rents sit in the middle of the pricing spectrum among the eight rental communities that Irvine Co. owned in Newport Beach as of last week.
Melia Homes’ proposal calls for the garden-style apartment complex to be razed and replaced with a 92-unit residential condominium complex.
The three-story condos would be built in a mix of stand-alone and attached homes. They would be built in a mix of coastal farmhouse, beach cottage and beach bungalow styles, according to documents filed with the city.
A pool, great lawn and community area are part of the design, filings show.
The sizes of the individual homes, and pricing, were not immediately disclosed.
The seven existing apartment buildings at Mariner Square are estimated to be about 135,000 square feet combined, according to data from real estate market tracker CoStar Group Inc.
Keeping the new project close to the same square footage, and avoiding additional potentially challenging entitlement issues in the city, would mean the 92 for-sale condos would average about 1,500 square feet.
One other Melia Home infill development about two miles away in Costa Mesa called the Boatyard has homes running nearly 2,000 square feet. Latitude at Newport Heights, another nearby infill project that’s sold out, also had homes in that size range.
CostaBella, a 13-unit project in Eastside Costa Mesa that’s about 1.5 miles from Mariner Square, has larger homes for sale, a little more than 3,500 square feet. Those are selling for about $1.7 million or more, according to the builder’s web site.
Melia Homes sold 64 homes in OC last year, ranking No. 19 among area builders in total sales.
The company also has housing projects under way in Yorba Linda, in addition to a number of projects in other Southern California regions.
“We are thrilled to be the owners of such an incredible community in Newport Beach,” Delzer said of the company’s latest purchase.
