A clock worth $17.7 million is now ticking for a 33-year-old Long Beach developer and a residential real estate company in San Juan Capistrano.
Cameron Hildreth, founder of Hilco Development, and his partner, Pintar Investment Co., have less than six months to come up with another $160 million to complete the purchase of the 92-acre Ziggurat complex in Laguna Niguel.
“We’re searching for strategic partners,” Hildreth told the Business Journal.
If successful, the federal building could become one of the largest development projects in South County, running into the billions of dollars with new residential, office and retail buildings.
Partners Hildreth and Jeff Pintar in October won the Chet Holifield Federal Building, a 1-million-square-foot complex located at 24000 Avila Road, with a $177 million bid.
They competed in a dramatic auction where the bidding started at $70 million. There were three bidders who submitted 157 bids. Two of them went back-and-forth, bidding almost every day between June 5 and Oct. 24. Each new bid had to be a minimum of $300,000 higher.
The pair have already made an initial 10% non-refundable deposit of $17.7 million to the General Services Administration (GSA).
Traci Washington, GSA’s regional communications team supervisor, told the Business Journal that if the winning bidder fails to close escrow and pay off the remainder of the final bid price, the deposit will be forfeited and the federal agency “will consider other options to re-sell the property.”
Drone Photography and Video by Trevor Bryson
Ziggurat to be Knocked Down
While Hilco said he was the winning bidder, his company is partnered with Pintar Investment. The Business Journal on Nov. 4 exclusively reported Pintar’s association with the winning bid.
Since then, Hildreth and Pintar have stepped out of stealth mode to share their plans for the site with the Business Journal.
“We’re going to knock it down — it never served its purpose,” Hildreth said, noting that the building’s demolition would cost between $20 million and $35 million.
Pintar indicated that there is no shortage of potential uses for the site that they could pursue. He said both would seek feedback from local stakeholders to determine what specific uses they would like to see implemented at the federal building site.
The goal, Pintar said, is for Hilco and his company to create a project “for the community, by the community.”
“The property certainly has tremendous opportunity and while there is no shortage of potential redevelopment options, the overwhelming feedback thus far from the local community is they’d love to see that building go away as fast as possible,” Pintar said.
Hildreth said Hilco prefers larger scale projects with big budgets because they generate greater value over time.
“We want a variety of uses,” he told the Business Journal.
Planning and Permitting Begin
The final price works out to be more than $1.9 million per acre and $177 per square foot.
Properties in South County, per CoStar data, have sold for about $4.6 million an acre, meaning the buyer acquired the federal building and surrounding property at a discount, reflecting the entitlement risk the winning bidders have under taken.
The property is currently zoned for offices and the winning bidders have no guarantee that it could be re-zoned for housing or other uses.
The project, which is located about seven miles from the Pacific Ocean, does not require approval from the California Coastal Commission.
However, Hilco Development must complete the entitlement process with the city of Laguna Niguel, which includes submitting an environmental impact report and complying with the California Environmental Quality Act.
Hilco Development is conducting due diligence on the property, which includes surveys and rent roll studies.
Hilco is exploring financing options and strategic partnerships to cover the $177 million payment to GSA, in addition to development costs. Hildreth noted that the property has some lead and geotechnical issues.
The team will meet with Laguna Niguel city leaders this month to discuss what could replace the Chet Holifield Federal Building.
Hildreth estimated that it could take three to five years to complete the entitlement process, demolish the building and develop the site with retail, residential and other potential uses.
Laguna Niguel Mayor Kelly Jennings didn’t respond to repeated requests to comment on what may become the biggest development project in years in South County.
Motivated by Surrounding Development
Hildreth said a few of his colleagues advised him to pursue the Ziggurat property. The established housing and retail surrounding the building lured him to jump into the auction.
“It has real interesting topography,” Hildreth said, adding that any future development would take advantage of the area’s view corridors.
The nearby roads are another asset, providing access to local businesses and Interstate 5. Major businesses near the site include Walmart, Kohl’s, The Home Depot, Target, Hobby Lobby and Costco.
Redeveloping the Chet Holifield Federal Building would elevate Hilco Development’s profile.
“We felt it was a great project for us on a larger scale. It’s a level up,” Hildreth said.
Who are Ziggurat’s Winning Bidders?
Pintar Investment Company, which was founded in 2009 following the national crash in real estate prices, advertises itself as primarily a residential real estate company.
According to its website, it started off investing in “scattered site single-family residential homes,” amassing a portfolio of 20,000 units at its peak.
The company has launched two opportunity zone funds, raising capital for residential rental projects. One opportunity fund aggregated and managed nearly 10,000 single-family homes in the Southwestern U.S., while another sought nationwide investors for residential and mixed-use projects across four states.
“Our philosophy has been just try to get singles, try to get base hits, a house at a time or a deal at a time,” founder Jeff Pintar said in a 2020 Opportunity Zones Podcast interview.
“What you realize is you can aggregate a nice portfolio of consistent cash-flowing investments, one base hit at a time, and wake up 5, 10, 15 years with a really stable portfolio of cash-flowing assets.”
On his LinkedIn profile, Pintar said the company currently manages 3,500 single family homes throughout the U.S. valued more than $500 million.
“Over the past 5 years, PIC and its related entities has invested over $2 billion on behalf of our investors and clients delivering in excess of 25% annualized returns,” Pintar says on his LinkedIn page.
From Carpenter to Developer
Cameron Hildreth, who started as an apprentice carpenter in construction, is now jumping into development of a project that is expected to cost billions of dollars.
“I do come from a construction background,” the 33-year-old said.
“I got into construction early. I went to a trade-focused high school and took building trade program classes. From there, I worked as an apprentice carpenter during the summers. In college, I became an estimating assistant at a heavy civil construction firm. I bartended at a country club on weekends, which led me into real estate, so I got my master’s in real estate development.”
Hildreth, a graduate of Arizona State University, began his career as an assistant estimator at Phoenix-based Hunter Contracting Co. He also managed a multimillion-dollar project in Malibu while at Los Angeles-based Caruso and consulted on a development for Signal Hill Petroleum Inc.
He also was a construction and development manager for a year at the Irvine Company and worked as a development and acquisitions coordinator for Vintage Partners in Arizona.
In 2017, he started Hilco Development Services.
“I’ve always aimed to run my own business. After leaving Caruso’s project, I was given that opportunity,” Hildreth continued.
Hilco Development has since managed several projects in Costa Mesa, Glendale, Irvine, Lake Forest, Las Vegas, Long Beach and Los Angeles. These projects include Gold’s Gym and the Masonic Temple in Glendale, Whole Foods Market in Irvine, Curry Pizza in Lake Forest, a multifamily development at 400 E. Anaheim in Long Beach and Hank’s Burger in Los Angeles.
Hilco said it has handled nearly $1 billion in total project value.
