Igor Olenicoff, Orange County’s second-wealthiest resident, is on the lookout for real estate acquisitions here and in other markets.
He has more than half a billion dollars to spend.
“We made a financing decision that will spur Olen into additional growth,” Olenicoff, president and owner of Newport Beach’s Olen Properties Corp., told the Business Journal.
That decision involved getting a mortgage on 11 apartment projects that Olen owns—in Las Vegas, South Florida and Atlanta—that previously were owned outright and debt-free.
“We simply could not pass up the current low mortgage market rates,” said Olenicoff, who added that the just-completed loan—with a rate in the 3.4% range—frees up $567 million, which will be used for acquisitions.
The additional liquidity “will put our emphasis on expansion both within our current operating regions as well as consideration of expanding into other regions,” said Olenicoff, whose privately held company’s commercial real estate portfolio runs some 8 million square feet, plus more than 16,000 apartments.
In July, the Business Journal estimated Olenicoff’s wealth at $5.5 billion. That figure trails only the $17.7 billion estimate of fellow real estate mogul, Irvine Co. Chairman Donald Bren, among the area’s wealthiest people.
It’s estimated that about a third of Olen’s apartment portfolio has debt on it, while the company’s office and industrial holdings, most of which are in OC, are largely debt free.
Southeast Push
“We anticipate finding our share of good projects to acquire in the coming year,” Olenicoff told the Business Journal.
Olen’s last big local purchase was two years ago when it paid $75 million for the nine-story 4100 Newport Place tower near John Wayne Airport.
Most of Olen’s recent purchases have been out of state and in the multifamily sector; it has been aggressively expanding its rental buys in the Southeast, a new market for the firm the past few years. It’s added several thousand units in and around the Atlanta and Nashville areas.
Recent additions include The Pointe at Suwanee Station, a 336-unit complex in Northeast Atlanta. That was bought around the start of summer on undisclosed terms.
The $567 million new loan’s lender is Buffalo’s M&T Bank (NYSE:MTB), and it was arranged by Don Curtis, senior vice president with the Newport Beach office of Grandbridge Real Estate Capital LLC.
The loan will “put our emphasis on expansion both within our current operating regions as well as consideration of expanding into other regions,” Olenicoff said.
There are plenty of challenges when it comes to buying quality properties these days, according to Olenicoff.
The “market for good projects is flooded with liquidity seeking to earn a market return,” Olenicoff said. “This has kept acquisition cap rates low and a brisk sales pace on institutional type properties.”
Florida Land Sales
In addition, “finding qualified development land and properties for acquisition is challenging and has been now for a number of years,” said Olenicoff, who recently completed a rare company sale of developable land in Florida.
His company owns more than 1,400 acres along the coast of Florida, about 25 miles east of Orlando.
The area, called the Indian River Preserve, counts a golf club that Olen also owns, and is entitled for 1,365 homes; only about 150 have been built to date. Arlington, Texas-based D.R. Horton recently entered a deal to buy 600 lots. Terms of the deal haven’t been disclosed.
The remaining lots will be sold over the next few years, according to Olenicoff, who said his firm will develop some additional commercial properties on its Florida land going forward, including a hotel.
Olenicoff’s take on the local business climate is extremely positive.
“Our occupancy and portfolio has never done as well as it is now, and in the 46-year history of Olen I have never seen a more positive business environment for real estate in Orange County.”
