Toll Brothers Inc. has completed the purchase of a sizeable parcel of developable land at the Orchard Hills community in Irvine, adding to the company’s collection of high-end home sites in the city.
An affiliate of the Horsham, Pa.-based company, which bills itself as the country’s largest builder of luxury homes, closed on land at a future phase of development at Orchard Hills, where it plans 223 homes.
The deal closed in May, according to property records, which indicated the nearly 161-acre chunk of land was sold by Newport Beach-based Irvine Company for about $200 million.
That price equates to nearly $900,000 per home site, which is among the highest priced land transactions for a large housing project reported in Orange County, not counting deals along the coast.
A sale at the $200 million mark also would be the largest residential land deal in Orange County so far this year, according to CoStar Group Inc. records.
Toll Brothers has been doing a large amount of early-stage groundwork at the site since the sale closed. Signs at the two entrances to the future project refer to the development as “Orchard Hill.”
The land is along the northern edge of Orchard Hills just south of the Eastern Transportation Corridor (261) toll road and near Portola Parkway.
Orchard Hills opened its first phase of development in 2014 and is gearing up for an additional batch of home models that will come to market this summer.
Toll Brothers wasn’t among the first group of builders at the development, which holds some of Irvine Co.’s higher-end homes in the city, with some houses topping the $2 million mark.
Prices in the $2 million and higher range are planned for the Toll Brothers neighborhoods, which will be in the gated part of the community, according to local market watchers.
A time frame for sales at the builder’s project has not been announced.
Toll Brothers executives could not be reached for comment.
Irvine Co. officials declined to comment on the land sale.
$500M Investment
Toll Brothers has committed more than $500 million for luxury home projects in Irvine since October.
The builder partnered late last year with Miami-based Lennar Corp. to buy a 272-acre swath of land along the northern edge of the former El Toro Marine base.
The land, north of Irvine Boulevard in one of the few hilly areas of the former base, is described in Lennar’s regulatory filings as Heritage Hills and is slated for 840 high-end homes.
Toll Brothers said in regulatory filings that it had invested $78 million in the Heritage Hills project through April, and that it had committed to make additional contributions of up to $219.5 million for the venture with Lennar.
The new venture’s assets are worth about $478 million, according to Lennar’s estimates. That equates to nearly $570,000 per lot.
The land bought by the Heritage Hills venture was once expected to be a future phase of home development at Great Park Neighborhoods in Irvine, but is no longer part of that project. Homes there could open in 2017 or 2018, depending on market conditions, according to the builders.
Toll Brothers “is one of the more aggressive groups” buying land in Orange County and other high-end markets in California these days, said Sal Provenza, a partner with Irvine-based land brokerage WD Land.
“They have a strong balance sheet,” which is helping them finance big-dollar acquisitions, said Provenza, a former land acquisition executive at Toll.
The builder is primarily looking at larger land deals holding 100 homes or more in Southern California, he said.
Toll Brothers has found success in Orange County recently by taking on big developments on its own or with just one other partner.
The company is the sole builder at the 250-home Hidden Canyon project in Irvine near the intersection of Laguna Canyon Road and Lake Forest Drive. It bought the land from Irvine Co. for an undisclosed price.
Hidden Canyon opened early last year, and prices there have been averaging more than $2.5 million.
Toll Brothers had 92 Hidden Canyon homes in backlog as of May, with a lengthy waiting list of potential buyers, Chief Executive Douglas Yearley told analysts during his company’s latest earnings call.
“With these large backlogs, we have raised prices $800,000 in the past year,” he said. “There is still a wait list for the next group of lots to be released, which indicates a continued high level of interest.”
Toll Brothers also has homes selling at the Baker Ranch development in Lake Forest, and has a pair of projects in Yorba Linda with prices in excess of $1.3 million.
