Melia Homes is the latest mid-sized builder here looking to diversify its revenue streams by upping its multifamily investment and development in Orange County.
The Irvine-based homebuilder—ranked No. 24 on this year’s Business Journal listing of the area’s top builders, with 36 sales in OC last year—specializes in single-family homes, but has acquired and built a few apartment projects in the past.
Changing market conditions, and a desire to boost cash flow, has motivated Melia to increase that aspect of its portfolio, which President Tim McSunas referred to as “opportunistic.”
“It’s time for us to look at where we are in the market cycle, and consider income generating opportunities that will help us stabilize, and not have to be so dependent on new home sales,” McSunas told the Business Journal. “So if there is a change in the market cycle, we can adjust.”
The homebuilder’s new venture, Melia Multifamily, will acquire existing apartment properties and buy land for new multifamily development.
60 and Under
Chief Executive BJ Delzer is leading Melia Multifamily, which may bring on additional employees as it grows. For now, it will pull from Melia Homes’ existing roster of 35 employees.
Melia Multifamily is eyeing opportunities in the 20- to 60-unit range for acquisitions and ground-up development, and plans to secure capital by working with the pool of investors it’s built up through its single-family projects.
“That’s a manageable size that won’t put us in direct competition with some of the larger multifamily developers in the area,” said McSunas, referring to companies with mega-projects underway in the area like Irvine Co. and Lennar Corp. The company will look at infill opportunities in markets close to its Irvine office, such as Anaheim, Stanton, and Placentia.
It currently has one apartment project in San Clemente and last year acquired Irvine Co.’s Mariner Square apartment complex in Newport Beach, a 114-unit complex in the Westcliff area of Newport Beach. At the time of the purchase, city records indicated that Melia was looking to tear down the older apartment complex to make way for one of the largest for-sale housing developments that part of the city has seen in years.
The proposed home community was expected to hold 92 units, but a time frame for development has not been disclosed.
Melia said this month that it plans to start acquisitions for the new multifamily group within the year.
On the single-family side, it’s business as usual.
“We are continuing to expand our business, and expect to deliver 140 homes this year,” a jump from the 83 homes delivered last year, McSunas said.
