The New Home Co., one of the most active builders on the Irvine Ranch in the past few years, is expanding its presence to other Orange County markets this year.
The Aliso Viejo-based homebuilding company recently announced plans to open a high-end project each in Ladera Ranch, Orange and Rancho Mission Viejo among its new collection of developments to debut in 2018.
The offerings also come as the builder, which has largely focused on pricey homes since its 2009 inception, adds more affordable offerings in OC and other markets.
“We’re trying to mix it up,” said Chief Marketing Officer Joan Marcus-Colvin.
The company’s biggest source of local sales last year was at the Crystal Cove community in Newport Coast, where its 55 homes sold out at an average price of $6 million.
It’s trying a different approach for some of the newest projects: At a Rancho Mission Viejo project called Azure, homes—some just over 700 square feet—were listed for sale late last year at around $350,000.
More affordable homes are also being planned just over the San Bernardino County line in Ontario, where a 75-home collection at Park Place community Seville go on sale this year.
Marcus-Colvin said the company’s 2018 goal is to gain momentum in what it calls the attainable housing market, where prices are $500,000 or less.
It hasn’t abandoned the high-end market, though, particularly in OC.
At another recently announced Rancho Mission Viejo community called Northwalk, called Topaz will offer homes as large as 4,420 square feet. Marcus-Colvin said prices there will start in the “low to mid $1 millions.” Model homes should open in the spring.
Similarly sized projects are planned in the Covenant Hills area of Ladera Ranch, where a 28-home development called Sky Ranch is coming this year. They will be the last new homes at Ladera Ranch, which is largely built out, Marcus-Colvin said, and will be single-story, “executive style” homes in the $2 million range.
In Orange, the 15-acre former administrative headquarters of the Roman Catholic Diocese of Orange, which New Home bought in 2016, will debut as a housing development this year.
The site’s former offices have been razed and are being turned into a 40-home project called Marywood Hills. New Home plans an April opening of models, with homes in the 4,000-square-foot range. Pricing hasn’t been announced.
New Home Co.’s stock hit a two-year high in recent weeks; its market valuation is about $275 million.
LA Blues
Office valuations in OC are approaching peak levels, particularly for high-end buildings in the area around John Wayne Airport. But that’s apparently not the case in other nearby markets, in particular downtown Los Angeles.
Case in point: Union Bank Plaza in L.A.’s financial district, a 40-story, 627,000-square-foot office owned by an affiliate of Newport Beach-based KBS Realty Advisors.
The real estate investor said in a recent regulatory filing that its latest appraisal of the skyscraper at 445 S. Figueroa St.—in September—valued the building at a 17.4% discount from a year earlier.
That’s a $52.5 million decline. The building was put up for sale early last year with a goal of getting nearly $315 million.
KBS noted that most of its offers “were well below” the 2016 valuation; it eventually reached a deal with an affiliate of Pacific Reach Properties in September to sell the building for about $280 million, but Pacific Reach ended up walking away.
Problems affecting the pricing include “unpredictability” of its largest tenant, Union Bank, which leases more than 300,000 square feet, as well as plenty of vacant space at other area buildings, KBS said. A glut of apartment development in downtown L.A. has also affected the valuation.
The property has extra land that’s been considered for housing, the KBS presentation to investors said.
It’s still listed for sale, and a deal would likely be profitable for KBS, which bought the tower in 2010 for $208 million.
