A year ago, the Government Services Administration (GSA) ran a sales auction for Laguna Niguel’s iconic Chet Holifield Building, better known as the Ziggurat building.
The GSA placed a $70M minimum price for the nearly 1M-square-foot federally owned building on 89 acres. It got no interest at that roughly $787,000 per acre asking price.
Last month, the GSA launched a new auction for the property it dubs Laguna Ridge, with the same starting price. This time around, the site had received a pair of bids through early last week, with the highest one running $125.3 million, or roughly $1.4M an acre.
What’s the difference between the two auctions? This time around, the government removed some prior conditions to the deal, such as a historic preservation requirement, making the property, one of the largest blocks of land available in South OC, a better candidate for more types of redevelopment.
“Disposing of underutilized and unneeded federal properties is important for helping us support local communities and save taxpayer dollars,” said Sukhee Kang, regional administrator for GSA’s Pacific Rim Region.
The GSA notes that the existing Ziggurat facilities need some $300M of repairs.
Kang, the former mayor of Irvine, has also noted the economic development opportunities the sale presents for OC, “as it introduces potential for new tenants, businesses, and employment in the area.”
The auction runs through the end of July; the names of the initial bidders haven’t been disclosed.
In 2011, an appraisal conducted on behalf of the City of Irvine valued vacant, developable land in the IBC area around John Wayne Airport at a little more than $2.1M an acre.
That land’s value has since nearly doubled; a recent appraisal by CBRE places a $4.2M per acre fair market value price on IBC land.
Notably, the 2024 value of land in that part of the city has actually declined year-over-year; it was valued at an all-time high $4.7M an acre in 2023.
Inflationary pressures, higher interest rates, constrained credit markets, and enhanced volatility in property markets played a large part in the recent decline, according to the appraisal.
The appraisal was conducted because Irvine’s General Plan requires developers to dedicate 5 acres of park land per 1,000 future residents of a project; that requirement can also be satisfied by a payment to the city at a fair market value price.
Industrial development now represents the highest and best use for the IBC land, the CBRE report said, a stark change from prior years, when a large part of the area’s older industrial base was razed to make way for new housing projects.
The city is considering adding entitlements for upward of 15,000 new housing units in the IBC—an area that’s now reached its development cap—as part of updating its General Plan for the next two decades.
If that plan moves ahead, expect prices in the IBC to start rising again.
Infill land eyed for residential uses still carries a heavy price in other areas of OC; see next week’s print edition for more on Landsea Homes’ $52M purchase of land in Surf City for a 129-home project. That deal worked out to over $9M an acre, per data from CoStar Group Inc.
