A 25-acre office campus in the Irvine Business Complex that city leaders once conditionally offered to buy for more than $300 million to ensure housing would be built there has been sold, marking the next chapter in the site’s transformation from aging offices to a future residential Âneighborhood.
TPG Angelo Gordon and Essential Housing Asset Management, an affiliate of home developer Lennar, purchased the former Von Karman Creative Campus, or VKCC, from IRA Capital LLC for $232 million, according to CoStar.
The nine properties, totaling about 433,000 square feet at 2121 Alton Parkway and 16715-16969 Von Karman Ave., were sold at what CoStar called “land value,” with plans for single-family development. The buildings have been under the wrecking ball for weeks.
A Lennar spokesperson declined to comment on the sale.
The joint venture paid $9.3 million per acre for the site.
IRA Capital officials confirmed that Lennar will build homes on the site.
Amer Kasm, co-founder and managing partner of IRA Capital, told the Business Journal that the sale fits the company’s strategy of repositioning complex properties and handing them off to builders after securing entitlements.
“From the outset, our strategy was to focus on what we do best—identifying complex opportunities, executing large-scale repositioning, and creating value through planning and entitlement,” Kasm said.
“Vertical homebuilding at this scale requires a specialized operating platform, and publicly traded homebuilders are uniquely positioned to deliver that efficiently and at scale.”
Kasm told the Business Journal that the deal is “a big win for the city and everyone involved.”
“This is what the community wanted and what the city wanted,” said Kasm.
Irvine Mayor Larry Agran told the Business Journal: “We welcome the addition of new, high quality residential communities in the Irvine Business Complex, furthering the long-term mixed-use vision for this part of our city.”
The Housing Deal
Built in 1988, VKCC once served as a highly amenitized office complex in the IBC near John Wayne Airport.
After the pandemic began, the region’s office market declined and still has not returned to pre-pandemic vacancy levels.
The IBC, once an industrial area, is gradually adding more housing.
Late last year, the Irvine City Council rezoned the IBC to allow up to 15,000 homes in the mostly commercial area.
Irvine-based IRA Capital and its partner, Boston-based Foxfield, bought the office campus from Blackstone for $100 million in 2023, according to CoStar records.
“Office is dead coming out of COVID,” Kasm told the Business Journal. “Industrial was the only thing that would pencil.”
They planned to get new entitlements from the city and build two warehouses totaling 541,000 square feet.
The joint venture spent two years securing approval for the land for industrial use, but community and city officials later encouraged them to switch to building more housing instead.
IRA and Foxfield initially planned to move the campus away from office use and redevelop the site as an industrial property.
They planned to get new entitlements from the city and build two warehouses totaling 541,000 square feet.
City officials urged the JV not to proceed with the industrial project and instead, to build more housing.
Under the threat of stiff state penalties, Irvine must plan for 57,656 housing units by 2045, nearly a 50% increase from its current 117,000 units.
The city must also comply with a state law signed last year that sets new buffer requirements between new warehouses and homes. The law took effect earlier this year.
As a result, the two sides reached a deal.
Pushing for More Housing
City staff said the joint venture needed to get industrial entitlements for its project to meet capital and investor requirements.
At the same time, the city preferred more housing, especially in the IBC.
According to the deal made last year, if the city approved the industrial entitlements, the joint venture would have to pursue a residential project on the site.
If the joint venture failed to proceed or the city denied the residential project, the city would have the option to buy the 25-acre site for about $317.5 million, or roughly $12.5 million per acre.
Land in the IBC with warehouse entitlements has been selling for $4 million to $5 million per acre.
City officials said the price for the housing would be “at the very upper end of what residential property has traded for in Irvine.”
Kasm said IRA worked with the city on a multi-track approval strategy, first getting industrial approvals and then switching to housing as the city’s planning priorities changed.
“We evaluate every investment through market fundamentals, capital strategy and long-term positioning,” he said. “Once fully vested residential entitlements were secured—particularly in one of Southern California’s most supply-constrained housing markets—the site was optimally positioned for a residential builder to execute.”
The joint venture eventually received approval to build 426 residential units, including a mix of housing types such as duets, detached homes, townhomes and stacked flats, all connected by internal walkways and courtyards.
Kasm said it only took six to eight months to get the residential entitlements, “which is unheard of.”
A Strategic Exit
IRA acquired the 25-acre site in January 2023 with Foxfield and spent roughly three years de-tenanting buildings, coordinating demolition and securing entitlements, Kasm said.
Once the approvals were in place, handing the project over to a national homebuilder fit the firm’s investment strategy.
“Our role in this investment was to unlock value through entitlement and repositioning, not to operate as a vertical homebuilder,” he said.
Foxfield remained involved throughout the process, from acquisition through sale, he added.
Kasm said Lennar’s size and experience in Irvine made it a natural fit.
The homebuilder is moving forward with a project that mostly follows IRA Capital’s approved plan, with some design changes to meet its standards.
Demolition of the old buildings has been going on for weeks. Kasm said construction is expected to start in the next few months, with completion aimed for 18 to 24 months from now.
From Office Campus to Housing Site
For IRA, the deal marks the end of a complex process to turn the office campus into a fully approved residential community.
Kasm said that over about three years, the firm got industrial approvals, switched to housing, worked through the city’s fast-tracked approval process, and got the land ready for redevelopment.
“As an Irvine-based firm, IRA Capital is deeply committed to investing in and contributing to the long-term success of our home community,” he said.
“This project reflects the strength of public-private collaboration and our shared commitment with the City of Irvine to thoughtful planning and disciplined execution.”
He said this work has set up the site for its next phase as housing in one of Southern California’s tightest markets.
GALLERY: Before and after photos of the 25-acre demo site at VKCC
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