If there’s an effect of the U.S.-China trade wars being felt in Orange County, don’t look to Irvine’s Great Park Neighborhoods.
FivePoint Holdings LLC (NYSE: FPH) officials said they’re not seeing any fallout from the well-publicized trade war, even though Chinese buyers have made up a large portion of sales at the Irvine development to date.
The company “hasn’t seen it at all,” Chief Executive Emile Haddad told analysts this month after the company’s latest earnings report.
“I don’t know what the reason is, but we haven’t seen anything in terms of any of the noise of trade impacting our business,” Haddad said.
Haddad maintains that sales at the Great Park have consistently bucked regional trends, pointing to high-profit margins for builders at recent stages of development. The master developer typically participates in profit sharing when a builder’s profit margins exceed 8%.
“We typically tend to see these types of [profit] participations come in the later phases [of a builder’s project, but] we are seeing them come in the first phases, which is very encouraging,” said Haddad.
“That means the builders are increasing prices.”
Hopeful Deal
The builder used the earnings call to reiterate its partnership with the City of Hope, which is purchasing nearly 11 acres of land and a building at the FivePoint Gateway for a new cancer campus and “micro hospital.” The campus’ first stage is expected to open in 2021.
FivePoint previously pegged total investment at about $1 billion, though specific financial terms of the office and land sale have not been disclosed to date.
“Our focus right now is on wellness and healthcare,” Haddad said.
