The development team responsible for the largest residential project under way in Santa Ana, the 1,221-unit Heritage apartments near John Wayne Airport, has its eye on another site in the city near the Discovery Cube Orange County for another big multifamily development.
A development group operating as AC 2525 Main LLC is seeking city approval to turn a North Main Street office property into a 517-unit project, city documents show.
The 81,000-square-foot office is just north of the Santa Ana (5) Freeway across the street from the Discovery Cube museum previously known as the Discovery Science Center.
The two-story office building and parking lot at the nearly 6-acre 2525 N. Main property would be razed to make way for the project, according to early-stage plans filed with the city late last year.
Countless older industrial properties across OC have made way for apartment construction during the recent building boom, but the Santa Ana building would be among the largest and relatively newest offices in the region to go that route.
The existing office property, built in 1982, is “under-utilized and functionally obsolete,” according to the development group.
AC 2525 bought the site last summer for nearly $17 million, and took out a $13 million loan with Hankey Capital LLC in Los Angeles to finance the project, property records show.
The group is a venture headed by executives with ties to Newport Beach-based Arrimus Capital and L.A.-based Vineyard Development.
The project’s managing partner is Chris Lee, a partner at real estate developer Arrimus Capital, which invests largely in student housing, apartments and industrial properties.
Ray Wirta, president of Newport Beach-based Irvine Co. and chairman of L.A.-based brokerage CBRE Group Inc., is also an Arrimus partner and part of the latest investment team, state records show. Wirta is Lee’s father.
Vineyards Development’s Ryan Ogulnick, who’s worked on several other apartment projects in Santa Ana in recent years, is another AC 2525 venture partner, state records show.
Heritage Playbook
The same group got entitlements a few years ago for The Heritage, a big mixed-use project in Santa Ana now under construction. Its development playbook for the North Main Street property appears to largely follow what was done at that site.
The Heritage is going up on a 19-acre property near the intersection of Red Hill Avenue and East Dyer Road near the edge of the Tustin Legacy development.
Before getting the site entitled, the property held nearly 335,000 square feet of largely unused industrial space, most of which has since been razed for the new 1,221-unit apartment complex, plus about 18,000 square feet of retail and restaurant space.
The project, near the Santa Ana-Irvine-Tustin city line, is one of the largest residential developments under way in the Irvine Business Complex area.
The Arrimus and Vineyard venture sold most of the re-entitled site in 2016 to Phoenix-based apartment investor Alliance Residential in two transactions valued at nearly $93 million.
They paid a reported $34 million for the site in late 2013 before getting it re-entitled.
Arrimus still owns a data center on the East Dyer property, where it plans a remodel and 45,000-square-foot expansion, according to its website.
Busy Street
A development schedule for 2525 N. Main St. hasn’t been disclosed.
Locals got an early view of the prospective project in late November, when city planners said they would take several months before making their recommendation on it to the planning commission and city council.
The five-story apartment building would wrap around an eight-story, 910-space parking structure, according to initial plans. Amenities would include rooftop meeting areas, outdoor courtyards, a fitness room, lounge and business office.
Architects Orange is heading project design, and entitlement work is being led by Sapetto Real Estate Solutions of Irvine.
The project adds to a heavy amount of apartment construction planned for sites near the Discovery Cube and nearby MainPlace Mall, which was OC’s ninth-largest shopping center last year, with $260 million in taxable sales.
About a year ago, Irvine-based PRES Cos. announced plans to build a 247-unit apartment complex on excess land at its 2700 N. Main St. office building next to the mall.
Other nearby rental projects include Newport Beach-based Picerne Group’s Eleven10 West, a 260-unit project a few blocks away in Orange that’s scheduled to open early this year, as well as several other projects in Santa Ana totaling 356 units.
“The ‘Main Place Area’ has emerged in recent years as a focal point for new development of luxury residential, mixed-use, and retail uses along this corridor,” noted marketing materials of the local office of Cushman & Wakefield, whose Lars Platt, Ian Lopez, Christopher Bosley and Spencer Ingram marketed the 2525 N. Main building for sale last year.
The office was sold by an affiliate of Wells Fargo Bank, which occupied much of the space there before downsizing the operations in recent years.
