Landsea Holdings Corp., OC’s newest homebuilder, has made its largest purchase to date for an infill housing development in Silicon Valley.
The Irvine-based homebuilder, the U.S. arm of China-based real estate company Landsea Group, last month completed the purchase of a 25-acre development site in Sunnyvale.
The property is entitled for 450 for-sale townhomes; the first phase of homes will be completed by late 2017, according to Landsea.
The Sunnyvale site was sold by Santa Monica-based Watt Companies, which bought it two years ago for a reported $60 million and got the former industrial site entitled for residential development.
Watt Cos. sold the land—which it calls The Vale—for $186 million, or roughly $7.5 million per acre, according to company officials.
The deal pushes Landsea’s investments in California over $300 million since November.
Landsea described the purchase as its largest acquisition to date, topping the price it paid late last year for a 95-acre site in Lake Forest called Portola Center South.
CoStar Group Inc. estimates the builder paid $178 million—roughly $1.9 million per acre—for the Portola Center South site, which was described at the time as Landsea’s flagship U.S. development, where it plans more than 550 single-family homes and townhomes.
A timeframe for the opening of the Lake Forest project hasn’t been announced. Grading at the site near the intersection of El Toro Road and the Foothill Transportation Corridor (241) toll road began last summer.
Prices for homes at Portola Center South will range from around the $400,000s to the low millions, according to the builder, which moved its U.S. operations from Pasadena to Irvine last year.
The Silicon Valley purchase is the seventh in the U.S. for Landsea, which in 2014 announced plans to invest more than $1 billion in this country’s housing market.
Reports say Landsea Group and its affiliates build about 12,000 houses a year in mainland China—about four times the number of homes built in Orange County last year.
Other Landsea Holdings projects in the works in the U.S. include sites in and around Boston, New York, the Bay Area and Los Angeles, according to the builder.
JVs, EB-5
Landsea isn’t going it alone with its latest purchase.
Financial reports out of China said it’s setting up a joint venture with Hong Kong-based development and construction firm Wai Kee Holdings Ltd. to finance the Sunnyvale project, whose total capital investment was estimated at $191 million.
Landsea was expected to have a 70% interest in the Sunnyvale venture and was contributing $133.7 million toward the project, according to those financial reports.
“The demand in Silicon Valley for quality, affordable and environmentally friendly housing is ferociously high and now Landsea U.S. is able to go some way towards meeting it,” said John Ho, Landsea Holdings chief executive, in a statement.
There’s been no report of Landsea having a venture partner for its project in Lake Forest.
Along with joint venture partners, the company also utilizes EB-5 investment for its U.S. projects, according to Landsea’s website.
The EB-5 program, also known as the Immigrant Investor Program, is a federal initiative administered by U.S. Citizenship and Immigration Services.
It allows foreigners to apply for permanent residency in exchange for investing $1 million in a U.S. business that could generate a minimum of 10 full-time jobs within two years of the investor’s admission to the U.S.
Landsea’s housing project is about two miles west of Irvine Company’s 100-acre Santa Clara Square development, where about 2,000 apartments have been proposed on land near the Newport Beach-based company’s newly built office and retail buildings.
