Construction is set to move ahead at several long-delayed development sites across Orange County next year, the latest sign of life in the area’s real estate market.
Home, apartment and perhaps retail development looks poised to move ahead next year at Tustin Legacy, the 820-acre former Marine helicopter base in Tustin. The site has been largely dormant for close to five years but should begin to see early-stage work move ahead after road work, now under way, gets finished next year.
Office development also is a possibility at Tustin Legacy, if city negotiations with Broadcom Corp. for a new campus prove successful.
The 31-acre Pacific City mixed-use project along Pacific Coast Highway in Huntington Beach also is expected to see construction work begin in earnest again next year. The project, located just south of the Huntington Beach Pier, has been dormant for nearly five years. But a new ownership team led by Miami-based Crescent Heights is now pushing ahead with plans for apartments, retail and a hotel at the site.
DJM Capital Partners Inc. recently closed on an 11-acre portion of Pacific City that will hold the retail and hotel component of the project. DJM said this summer that it expects work to start at the site in 2013.
OC’s tight industrial market—vacancy rates run close to 5%, the lowest in the county for any commercial segment—should also see a boost from development, with Sacramento-based Panattoni Development Co. expected to move ahead with 1 million square feet or more of construction on former Boeing Co. land in Anaheim.
The only big office project fast-tracked for construction next year is at Newport Center. That’s where Irvine Company plans a 19-story building next to its existing headquarters as well as another high-rise that is well under way and will be the headquarters of Pacific Investment Management Co.
Pimco will shift from its current Newport Center building when its new headquarters is complete. Leasing and tenant plans for the second new building are not confirmed.
The rest of OC’s office market still counts a sizable amount of empty space, so don’t expect to any other major projects to move ahead unless they get upfront commitments from tenants.
COMPANY TO WATCH: RANCHO MISSION VIEJO LLC
The past three years have seen the Irvine Company prove that new home sales are doable in Orange County, even amid a struggling national housing market.
Next year will see other large developers set out to prove that strong sales can thrive on land outside the Irvine Ranch. Rancho Mission Viejo LLC, OC’s second-largest land owner next to Irvine Co., is among them, rolling out a new, 940-home project along Ortega Highway.
The project, called Sendero, is set to open for sales next year and is the first new development for Tony Moiso’s company since it finished up work at Ladera Ranch in 2007.
Several builders are planning to build homes on the company’s land, which will feature some homes designed for older residents. Apartments are also planned at the project.
RMV will have its share of competition in South OC next year, with new developments in Lake Forest and on Irvine Company and Great Park land in Irvine.
But with signs of a housing recovery under way, demand for new homes could end up being stronger than any time in the past six or so years. And that should give developers confidence to move ahead with their projects.
—Mark Mueller
PERSON TO WATCH: EMILE HADDAD
Intrigue has surrounded the Orange County Great Park—and a proposed residential development adjacent to the park project—ever since Lennar paid the Navy $1 billion to acquire the former El Toro Marine base in 2005.
The upcoming year bodes possible new twists in the long-running saga that could have a lasting impact on the shape, scope and finances of the park and related proposals.
Emile Haddad’s FivePoint Communities Management Inc., developer of the proposed Great Park Neighborhoods, wants to build 10,700 homes—almost twice the number previously planned—on 3,700 acres of Great Park-adjacent land he and investors own.
The Lennar veteran is offering the city of Irvine an incentive: somewhere around $200 million to jump-start work on the long-delayed build-out of the 1,300-acre park itself.
He needs city approval for his proposals, and a newly reworked Irvine City Council adds a new wrinkle to the already complicated review negotiations. Next year looks likely to test Haddad’s real estate acumen and political mettle.
—Mark Mueller
