Lennar Corp. plans to begin construction by year’s end on the first phase of residential development at its massive—albeit slimmed down—A-Town project in the Platinum Triangle.
Officials with the multifamily division of the Miami-based homebuilder expect work to begin on the 400-unit apartment complex at A-Town in coming months—a timeline that assumes Anaheim’s city council will sign off on revised plans for the 43-acre site.
Additional phases of residential development, including for-sale townhomes and condominiums, are likely to be rolled out by Lennar on a year-by-year basis, depending on market conditions, according to Ryan Gatchalian, president of the company’s multifamily development division in Southern California.
“We would expect to start one (new phase) per year,” he said.
Lennar’s latest plans for A-Town call for as many as 1,746 homes and apartments to be built on its land, located along Katella Avenue and State College Boulevard. The tallest buildings at the site would run seven stories.
Up to 50,000 square feet of commercial space—likely including a grocery store—would also be built on the land to serve area residents under the builder’s latest plans for the site, which is across the street from Angel Stadium.
The land for the development saw partial construction of on-site streets and infrastructure completed several years ago.
Some additional demolition work and grading is expected in the next few months to prepare the site for a start on the apartment project, Gatchalian said.
The A-Town project, when initially proposed nearly a decade ago, was expected to be the centerpiece of new development at the Platinum Triangle, the 820-acre largely commercial area that surrounds the city’s baseball stadium.
Lennar’s development plans for A-Town initially called for 2,681 homes, including high-rise condo towers topping 30 stories, as well as up to 150,000 square feet of retail space.
The project, as first envisioned, was by far the largest of 16 new residential projects proposed on former commercial properties within the Platinum Triangle.
The largest residential project completed in the area over the past decade has been the 390-unit Stadium Lofts project at 1801 E. Katella Ave. Nearly 2,000 residential units—primarily midrise apartments—have been built in the area over the past decade, and nearly another 1,000 are now under construction, according to city records.
‘Flexible’
Development plans for A-Town were put on hiatus in 2008 amid the last recession and housing crash.
Lennar officials announced a more modest plan for the project in late 2013, without specifying a time frame for moving ahead on it.
A new development plan filed by Lennar this month with Anaheim’s planning commission largely mirrors the 2013 proposals, swapping out high-rise condos for the current midrise rental and for-sale properties.
Lennar “values our asset in Anaheim’s Platinum Triangle and is eager to begin this project,” Donna Kelly, vice president of community development for the builder, said in an Aug. 31 letter to the city.
The builder’s initial development agreement with the city was signed in late 2005 and is set to expire by the end of the year.
The new development plan, in addition to extending the term of that initial plan, would allow Lennar to build between 1,400 and 1,746 homes, with a mix of rental and for-sale units.
The revised proposal “creates a site that’s flexible” and can accommodate either more rentals or condos in later phases, depending on the state of the local housing market, Gatchalian said.
Condo towers aren’t economically viable for the site, despite recent proposals from other Platinum Triangle developers that include high-rise features, he said.
“Our view is that that market doesn’t support high-rise development.”
The revised plan was approved by Anaheim’s planning commission last week in a unanimous vote.
New Financing?
The 400-unit apartment project planned in the first phase of development for A-Town is being headed up by Lennar Multifamily Communities, the apartment development arm of the homebuilder.
Other area projects that the apartment division—whose Western U.S. operations are based in Aliso Viejo—has in the works are a 200-unit rental project in Fullerton opening later this year called Malden Station, as well as sites in Hollywood and West Covina.
Gatchalian declined to comment on whether there were any equity partners involved with Lennar in the upcoming Anaheim apartment project.
The last time the builder was known to have disclosed its financial state in its Platinum Triangle land holdings was in 2009 when it said it had invested $95.6 million, not factoring in the stakes held by other venture partners.
Sovereign Funds
Recent comments from other Lennar executives suggest that the 400-unit A-Town apartment project, and perhaps future phases of A-Town, could be among the larger developments included in an equity fund the company just created with a handful of undisclosed global sovereign and institutional investors.
The new apartment development fund, announced in July, has about $1.1 billion in equity commitments, including a $504 million co-investment commitment by Lennar.
The project is being seeded with 19 undeveloped multifamily projects that were previously purchased or under contract by Lennar Multifamily Communities, which when built out should total 6,120 apartments, the company said.
The locations of the individual developments were not disclosed in the July announcement.
Lennar Multifamily Communities’ website lists 13 company projects—including A-Town—as being earmarked for future development.
Lennar Corp. said the new fund will result in the company becoming more of a long-term owner in the projects it builds, rather than just being a merchant builder.
“To date, we have been building our apartment communities in individual ventures, which were structured to sell the assets once they were leased and stabilized,” Lennar Chief Executive Stuart Miller said at the time of the July announcement.
In addition to receiving a consistent fee stream from rents, the new venture “allows us to earn the development (earnings) when the community is stabilized and maintain an ownership interest in the income-producing community going forward,” Miller said.
