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Thursday, Apr 18, 2024

Shopoff Pays $65M For Fountain Valley Land

A $65 million land buy in Fountain Valley for Shopoff Realty Investments has capped off an active year of real estate deals for the Irvine-based developer and entitlement specialist, with more activity poised for 2022.

An affiliate of Shopoff in December completed the purchase of a nearly 19-acre site that’s about a mile north of the San Diego (405) Freeway, at the intersection of Euclid Street and Heil Avenue, the Business Journal has learned.

The property sits to the east of Mile Square Regional Park, between Edinger and Warner avenues.

The land, long used as a strawberry farm, sold for about $3.5 million an acre. By total price, it’s the biggest real estate transaction in Fountain Valley in three years, according to data from real estate market tracker CoStar Group Inc. 

The land was sold by several members of the Miller family, the longtime owners of the site, making the sales process a challenging one, company CEO and President Bill Shopoff told the Business Journal.

“Every developer in Orange County had taken a look” at the property, he said.

Housing Potential

Specific plans for the Fountain Valley land haven’t been disclosed by the buyer. The site’s designation was changed about four years ago from agricultural to low-density housing.

City documents pertaining to that designation indicated that the land could potentially hold 93 units, or five units an acre, though Shopoff told the Business Journal last week that a larger project holding several hundred homes or rentals on the land is possible.

The city sees the property “as a site with the opportunity to fulfill market needs for various types of housing,” Shopoff said.

“The current proposal that is being studied is for High Density Residential land use designation on the Miller Site,” the city said in August.

Development could move ahead at the site in the next year or two, according to Shopoff.

OC Presence

The Fountain Valley buy adds to a growing collection of development sites for Shopoff, which has made its mark locally getting residential and mixed-use approvals for sites that face their share of challenges in the entitlement process.

It’s overseeing the development of the Uptown Newport mixed-use project in Newport Beach along Jamboree Road, which counts a collection of rentals and for-sale units that are being built by a mix of firms.

Uptown Newport is near the new $1.2 billion UCI Health medical campus on the other side of Jamboree Road that’s now in the early stages of construction.

Shopoff is also overseeing the 29-acre Magnolia Tank Farm development site not far from the ocean in Huntington Beach, which in early 2021 got the city’s okay for a mix of homes, restaurants, retail space and a hotel.

2021 Recap

Outside OC, the company ended the year on an acquisition push, with a 54-acre land buy in the Phoenix region of Arizona for an industrial project, and a 1,463 acre land deal in Riverside County’s Calimesa among its more recent purchases.

Bill Shopoff, in a December letter to investors, also noted the firm’s selling strategy in 2021, noting nine dispositions over the course of the year, totaling nearly $70 million. Several more are on tap, he said.

On the buying front, 2022 is poised to a very active year, he said.

“As I sit here in early December, I am pleased to report that we have the largest pipeline of new, high-quality acquisitions anticipated to execute in early 2022 – over $700 million under review or under negotiations,” Shopoff said.

Challenges remain, he said in the letter.

“One of the issues that we have encountered with our entitlement and development projects is the shortage of material and high commodity prices,” Shopoff said.

“Although prices for residential housing is at an all-time high, the residual value of our holdings has not been able to realize the full value of the price increases due to the higher material costs. We are hopeful that this will normalize over the next year, as supply chain issues are resolved.” 

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