AvalonBay Communities Inc. has cornered the market for apartments—at least on one corner of the heavily trafficked intersection of Jamboree Road and Alton Parkway in Irvine.
The Arlington, Va.-based apartment developer and investor paid a reported $11 million for 16952 Millikan Ave., a roughly 2.5-acre property that sits along Alton Parkway across the street from the Diamond Jamboree shopping center.
The deal, which closed about a month ago, is among the largest apartment-related land transactions reported in Irvine this year.
Avalon Irvine III
The property currently holds a 40,500-square-foot industrial warehouse that will make way for a 156-unit apartment complex. Brokerage data show that construction could begin as soon as this summer for the project, which is tentatively being called Avalon Irvine III.
As the number suggests, it will be the third AvalonBay-built apartment complex on the same block in Irvine, about a mile north of the San Diego (405) Freeway.
The company’s initial Avalon Irvine complex, also at Alton and Jamboree, opened in 2010 and has 280 apartments. The project cost about $77 million to build and was more than 90% occupied as of the end of last year, according to filings with the Securities and Exchange Commission. Monthly rents at the complex ran about $1,760 then.
A second project, the 179-apartment Avalon Irvine II, opened near the end of the year on an adjoining property. It recently wrapped up construction and cost $46.2 million to build, according to SEC filings.
The company now has more than 3,200 Orange County apartments in its portfolio, which runs more than 52,000 units on a national basis.
More development could be on the way elsewhere in the county.
Apartment Project
The company is said to be the recent buyer of a nearly 15-acre land site at Lake Forest’s masterplanned Baker Ranch development, where more than 400 apartments are expected to be built.
The apartment project, which will be near the intersection of Alton Parkway and the Foothill Ranch (241) Toll Road, would cost more than $80 million to build, according to brokerage data.
AvalonBay officials said during the company’s last earnings call that employment growth in OC and other parts of Southern California is helping push up rents in the area by about 4.5% on a year-over-year basis.
“In the greater Orange County region, job gains are pretty broad-based and include hiring in the entertainment sector led by Disney; financial services, including Bank of America; health care, including UC Irvine Health and Kaiser Permanente; and education,” AvalonBay Executive Vice President Sean Breslin said during the earnings call.
Mill Creek, Trammell
Dallas-based Mill Creek Residential Trust LLC, a company spun off from Trammell Crow Residential a few years ago, previously handled development plans for the 16952 Millikan property. The residential project received city approvals in 2011.
Property records show an affiliate of Trammell Crow sold the site to AvalonBay this month.
Mill Creek Residential is handling development work for another Irvine project currently on the books, a proposed 194-unit complex on Kelvin Avenue a few blocks from the just-sold site.
AvalonBay’s plans continue the apartment push in the Irvine Business Complex, the 2,800-acre area around John Wayne Airport that has been a commercial and industrial center in the past.
More than 10,000 condos and apartments have been proposed for the IBC, but to date, a majority of the area’s new residential development has been in rental properties.
