Laguna Terrace Park is up for sale.
The 46-acre mobile home park, located on a set of rolling hills just off South Coast Highway, could fetch offers in excess of $50 million.
It counts a mix of full-time and part-time residents with leases on parcels for a variety of ranch-style, double-wide units.
It’s the first time the park—near the Montage Laguna Beach resort—has been listed for sale.
A deal for the property, one of the last and largest mobile home parks in Laguna Beach, is expected to be completed by early next year. A sale will take Laguna Terrace’s ownership out of the hands of the family of the property’s original developer, Paul “Doc” Esslinger.
Esslingers
Esslinger and his wife bought the land in the 1940s and developed the property in the 1960s, according to local reports. Laguna Terrace had been managed and run by their grandson, Stephen Esslinger, for the past 25 years under terms of a long-term ground lease.
Stephen Esslinger, who had initiated an unsuccessful attempt at converting the park to resident ownership a few years ago, died in March.
“With Stephen gone, the family feels it is time for the park to begin a new era under new ownership,” said Rob Coldren of Hart, King & Coldren, a Santa Ana-based law firm representing the seller.
Brokers with the manufactured housing and multihousing groups of CBRE Group Inc. have the listing for Laguna Terrace, which is going to market unpriced. Offers for the property, located at 30802 S. Coast Highway, are due by the end of November.
Brokers involved in the deal declined to speculate on the likely sale price for the property, noting several factors could have a big impact on Laguna Terrace’s value, including a buyer’s long-term plans for the site.
Comps
The 37-acre Huntington Shorecliffs mobile home park in Huntington Beach, which traded hands in 2008, was recently valued at more than $54 million following a refinancing of its debt earlier this June.
A sale of Laguna Terrace—which had a $32.7 million mortgage tied to it as of last year, according to property records—appears likely to get a higher price than Huntington Shorecliffs’ latest valuation.
CBRE brokers call Laguna Terrace “one of the premier mobile home parks in the United States,” and said they expect the property to get a good amount of national and international investor interest.
A new owner is likely to change monthly rents in the $3,000-to-$4,000 range.
“We expect to see strong competition from both institutional and private investors—this kind of property just doesn’t come along every day,” said Laurie Lustig-Bower, a broker in the Los Angeles office of CBRE who has the listing with colleagues Vince Reynolds and Norm Sangalang, both of the brokerage’s San Diego office.
Still Interested
Members of the association board representing Laguna Terrace’s residents said earlier this summer they were still interested in buying the land, despite legal complications that arose the past few years after Stephen Esslinger attempted to subdivide the property as part of the effort to convert it to resident ownership.
Some potential buyers could see the property as a long-term redevelopment opportunity, according to CBRE’s Lustig-Bower. That could drive up the price of the land by a significant amount, considering the property’s location.
Orange County has seen its share of pricey mobile home park sales in recent years.
Capistrano Shores
Capistrano Shores, a stretch of land with about 90 oceanfront beach cottages on the northern tip of San Clemente, sold in 2008 for an estimated $100 million in one of the larger land deals of the year.
The beach cottages, which had operated as a mobile home park, were acquired by the community’s homeowner’s association, Capistrano Shores Inc.
This summer saw a nearly 23-acre property in Huntington Beach known as the Rancho Huntington Mobile Home Park trade hands for about $13.1 million, or about $570,000 per acre, according to brokerage records.
An undisclosed buyer bought the Huntington Beach property, which counts 194 mobile home spaces.
