The U.S. Postal Service has completed the sale of one of the last big parcels of developable commercial land in Aliso Viejo, which is now slated for a mixed-use property emphasizing medical uses that will total more than 500,000 square feet.
CT Realty Investors, one of Orange County’s biggest developers and investors in recent years, last month closed on the purchase of a 25.6-acre site on Liberty Road not far from Aliso Viejo Town Center.
The developer, which moved its headquarters from Aliso Viejo to Newport Beach earlier this year, paid the Postal Service about $33.6 million, or $1.3 million an acre, for the land at 4 Liberty, according to CoStar Group Inc. estimates.
CT Realty had been working with Aliso Viejo for close to two years for approvals on a mixed-use project for the site prior to the deal’s closing, city filings show.
After several revisions in plans, the land will now hold an affordable housing project for seniors, an assisted living facility, a 40,000-square-foot medical office building, and a multibuilding office park totaling close to 100,000 square feet that will likely be geared toward healthcare users.
CT Realty, whose focus has largely been on building and buying industrial and office buildings in recent years, won’t develop the entire site by itself, instead selling off individual sections of the project to other companies for either build-to-suit or development opportunities.
“It’s a little bit of a departure for us, which is why we’re interested in parcel sales,” said Carter Ewing, executive vice president for CT Realty, who heads up acquisitions for the privately held company.
Several portions of the project already have been tied up by other companies, according to Larry Schuler, first vice president for the Newport Beach office of CBRE Group Inc., who helped broker the sale of the land to CT Realty and is now marketing individual parcels for the new owner.
Medical Mix
Property records show that one portion of the former USPS property has already re-traded, with an affiliate of Roseville-based USA Properties Fund Inc. paying about $6 million for the 4-acre parcel, which will hold a 200-unit senior housing property.
USA Properties is a developer of senior living and affordable housing projects, and already is working on a similar project just down the street from the USPS site.
An affiliate of USA Properties got a $5.6 million loan from Century City-based Century Housing Corp. to finance its latest Aliso Viejo purchase, according to property records.
Construction on the 225,000-square-foot affordable senior housing project should begin this year, according to CT Realty’s Ewing.
A 155-unit assisted-living facility running 145,000 square feet also is planned for the former USPS site.
An affiliate of Steadfast Cos. in Irvine was previously to run the assisted-living facility, according to city filings, but is no longer part of the deal, Ewing said.
Steadfast also is involved in a 211-unit senior housing project under development a few miles away in Laguna Niguel called Crestavilla.
Another assisted living developer is now in escrow to buy the USPS land, Ewing said.
Also on tap: a 40,000-square-foot medical office building, which will be anchored by one of the area’s major healthcare networks, he said.
The last big portion of the site, whose development is still in flux, is roughly 5 acres that are being eyed for a multibuilding office development.
The land previously was considered for a creative-office development, but the plan now is to make the project more focused toward healthcare tenants and owner-users, Ewing said.
Medical uses are “where the momentum is on the site right now,” he said.
Creative-office features are still likely for some of the buildings, depending on user needs, CBRE’s Schuler said.
The new 205,000-square-foot headquarters for medical device maker MicroVention Inc., which is being built about a mile away at the Summit Office Campus, should attract other medical technology firms to the area, city documents note.
Mail Facility Scrapped
The USPS sale ends a long-running saga over the property’s ultimate use.
The Postal Service had owned the Aliso Viejo land since the early 1990s, paying nearly $15 million for the site, according to brokerage data. The land initially was targeted for a mail-processing facility running more than 400,000 square feet.
After several years of delays due in large part to resident and city concerns over the size and location of the proposed facility, the project was put on hold in early 2009 during the recession and a big drop in mail volume.
By 2011, the Postal Service announced it planned to sell the land, which is between a Pepsi distribution plant and a school district bus yard.
The site also is about a mile away from a United Parcel Service Inc. distribution center next to the San Joaquin Hills (73) Toll Road.
Last month’s transaction with CT Realty, coming in a strong real estate market, ultimately proved to be a good time for the Postal Service to sell the land, CBRE’s Schuler said.
That said, “There were other market cycles where they could have sold, too,” and perhaps made more on the land sale, Schuler said.
