One of Orange County’s wealthiest apartment owners is going upscale.
Patrick Cadigan, a private investor whose family runs Newport Beach real estate firm Cadigan Communities, recently closed on the purchase of the Nineteen01 complex in Santa Ana.
The 264-unit, mid-rise project sold for $98 million, or a little more than $370,000 per unit.
Built in 2016, it’s the second-priciest apartment sale in OC this year, trailing only a $100.8 million of The Charlie, a 228-unit development also in Santa Ana that’s wrapping up work.
Nineteen01 is next to the Xerox Centre office complex along First Street, just off the Santa Ana (5) Freeway.
The five-story building has a mix of one, two- and three-bedroom units ranging in size from 815 square feet to about 1,800 square feet, with rents starting around $2,000.
The project, currently about 95% leased, has a rooftop pool, fitness center, ground-floor retail, and a dog park among other amenities.
2,000 Units and Growing
The deal is the most expensive acquisition on record for Cadigan, whose related entities are estimated to own about 2,000 rentals units across the county, many of them in Central OC.
The new asset brings his local portfolio to north of 1.6 million square feet.
The Business Journal estimates his wealth to fall just below that of the $500 million threshold to make this week’s OC’s Wealthiest list (see list, page 20), when factoring in debt.
In the case of Nineteen01, the deal was financed in part by a $60.8 million loan from Capital One Financial Corp., led by Kristen Croxton and Greg Reed from the company’s Newport Beach office.
Cadigan frequently pairs with Capital One for local investments, typically Class B or workforce housing projects.
“This is the buyer’s first foray into brand new Class A projects,” Reed told the Business Journal.
“It’s a game-changing project that is largely over improved for the immediate area, and requires a patient buyer to allow the submarket to catch up.”
Shane Shafer from the local office of NorthMarq Capital brokered the sale of Nineteen01 along with Tustin-based brokerage Greenwood & McKenzie, which represents Cadigan in his real estate investments.
Cadigan, a Corona del Mar resident, is the former chief executive and president of Electronic Engineering Co. of California, one of OC’s first electronics manufacturers.
He’s a benefactor of his alma mater, Boston College, having previously reported to have donated $27 million to fund a new alumni center and an arts and recreation center at Boston College High School, which he also attended.
The investor owns a dozen or so other properties in the OC area, most recently purchasing a 224-unit Class B Tustin apartment project a year ago.
The 179,000-square-foot Monterey Pines project at 15513 Williams St. sold for an undisclosed price.
Lyon, Integral
While Cadigan’s estimated fortune is believed to be just south of $500 million, the sellers of Nineteen01 have ties to a pair whose wealth likely runs $1 billion or more.
Lyon Living built the project in 2016 in a venture with a fellow Newport Beach developer, Integral Communities. Lyon Living was launched in 1988 by Gen. William Lyon, better known for his homebuilding arm William Lyon Homes (NYSE: WLH).
The apartment company had more than 11,000 units in its portfolio as of a few years ago, and the Lyon family is said to still have a 50% stake in the rental business, which is run by Chairman and Chief Executive Frank Suryan Jr.
The Business Journal has previously reported that Integral is backed in part by Vinny Smith, the former chief executive of Quest Software and now one of the area’s top venture capitalists through his Toba Capital (see story, page 1).
Smith is estimated to have a fortune of $2.4 billion, while Lyon and his family’s wealth is estimated at $1.2 billion.
Lyon Living and Integral have worked on several projects together in the area, and are currently building a five-story, 215-unit apartment project in Placentia next to the under construction Metrolink Station.
The company bought the just-sold site at 1901 E. First St. in 2012.
It previously held a 167,000-square-foot office building.
