Mobile home parks have become an increasing source of opportunity for local homebuilders seeking infill development locations across Orange County as available land quickly disappears.
More than $150 million in land sales involving mobile home and recreational vehicle sites, both existing locations and recently closed sites, have taken place over the past year, according to brokerage records.
A majority were bought by developers seeking to convert the land into for-sale housing projects, and several hundred homes are in the works by a variety of builders.
Local builders like Irvine-based MBK Real Estate LLC and Seal Beach-based Olson Co., both of which focus on infill development in OC, have found such locations to construct developments.
National builders, including Scottsdale-based Taylor Morrison Inc., also have snapped up local mobile home parks in recent years as part of a strategy to build up their OC land bases.
Builders like the sites because they can be converted into ground-up development relatively quickly, plus the fact that land prices often can be a fraction of what other nearby parcels trade for.
Cities many times see the redevelopment of the sites as a way to boost the property values of the land, which is frequently in some of the county’s most desirable coastal locations.
Affordable housing advocates, though, have fought many of the sales, noting that the deals can result in the sudden displacement of long-term residents, including large numbers of older people, military veterans and low-income residents.
But with large land deals hard to come by and increasingly expensive (see related story, page 16), and Orange County likely to remain an active market for national builders for the foreseeable future, expect to see more mobile homes sites sought for conversion.
CoStar Group Inc. records list more than 80 mobile home and manufactured home sites in Orange County with roughly 9,000 lots. Of those, there are a little more than 4,000 mobile home lots remaining in OC targeted toward lower-income residents, according to a report last year by Stanford University’s Peninsula Press.
Laguna Beach, Anaheim and Huntington Beach have been among the OC cities with the most closures in the past decade, according to Peninsula Press data. Nearly 4,800 lots across the state were closed or converted to other uses during that period, roughly 11% of them in OC, the report said.
Newport, Anaheim Projects
Recent notable land deals taking place include a nearly 5-acre site about a mile north of the ocean in Newport Beach, just off Superior Avenue.
The former site of the Ebb Tide Mobile Home Park was acquired in December by an affiliate of MBK Real Estate.
It’s being converted into a single-family community called Ebb Tide. The project will hold 81 single-family homes of 1,708 square feet to 2,157 square feet, and feature large roof decks.
MBK is estimated to have paid $22 million for the land at 1560 Placentia Ave., according to CoStar records.
The deal works out to a little more than $270,000 per planned unit—roughly half, if not less, than what other Newport Beach land sites considered for homes can trade for.
Homes should be rising this summer and sales beginning, MBK Chief Financial Officer Kent Crandall told the Business Journal last month.
The project is an example of the company, a unit of Japanese industrial conglomerate Mitsui & Co., focusing on urban infill locations in its core California markets, Crandall said.
Further inland, Olson Co. has its own project in the works on a 5.5-acre site at 2337 S. Manchester Ave. next to the Santa Ana (I-5) Freeway and a couple of miles south of Disneyland.
The builder is in the process of getting city approval for a 120-home project that would go up on the current site of the Ponderosa RV Park, a 144-space recreational vehicle park. The RV park is next to the Ponderosa Mobile Estates park, which isn’t part of the proposed housing development.
CoStar records show the land that would hold the housing project sold in mid-2015 for an estimated $36.7 million; it’s unknown whether the adjacent mobile home park was part of the sale.
Olson Co.’s plans call for three-story townhomes at the RV site running from 1,312 to 1,768 square feet.
“Our project vision is to transform this underutilized site into an inviting and well amenitized community that fits strategically within the context of the adjacent residential neighborhood and commercial uses,” Olson Co. officials said in a letter to the city.
Their plans for the project went to Anaheim’s planning commission last month.
Dana Point appears to have seen the priciest sale of a one-time mobile home park in the past year with the $50 million sale of Doheny Beach Village, a 9-acre site near the entrance of Dana Point Harbor.
Zephyr Partners, an Encinitas-based real estate development and investment company, bought the land in June for its first big residential project in Orange County.
The now-vacant development site was once home to a mobile home park and is now slated to hold 168 townhomes at the intersection of Pacific Coast Highway and Del Obispo Street.
The three-story project will feature one-, two- and three-bedroom townhomes and a few thousand square feet of retail space.
Construction will start this year and is scheduled for completion in 2019, according to Zephyr Partners.
Newport Beach-based Makar Properties once planned a residential development at the site after buying the land in 2004 for $10.1 million, according to CoStar records.
The land once held a 90-unit mobile home park, which was shut down as Makar worked to get city and California Coastal Commission entitlements for a residential and commercial development.
The project was delayed during the Great Recession and housing downturn, when Makar and its financial partners also lost ownership of the St. Regis Monarch Beach hotel in Dana Point.
Keeping Things As-Is
Not every mobile home park sale results in a change of the property’s land use.
Newport Beach investors Pacific Current Partners and Saunders Property Co. in late December partnered to buy Palm Beach Mobile Home Park, a 126-unit oceanfront property in San Clemente.
The 12.3-acre site sold for about $37 million, according to brokerage data.
It’s the partnership’s eighth manufactured housing acquisition in the past two years, according to the buyers.
Pacific Current Partners is a manufactured housing investor group. Saunders Property’s John Saunders is one of the area’s larger private real estate investors, and also runs one of the country’s biggest coin dealerships.
“Whereas most other buyers of manufactured housing communities in premium California markets have aimed to convert their properties to ‘higher and better use,’ (the new owners) share a commitment to owning and operating our properties as manufactured housing communities for the long term,” the Pacific Current-Saunders team said in a statement.
The largest reported sale involving a mobile home park here in the past decade also took place in San Clemente.
Capistrano Shores, a stretch of land with about 90 oceanfront beach cottages on the northern tip of the city, sold in 2008 for an estimated $100 million in one of the largest land deals of the year.
The beach cottages, which operate as a mobile home park, were acquired by the community’s homeowner’s association, Capistrano Shores Inc., eliminating any chance of a redevelopment by other owners.
