An Irvine office property is slated to be demolished for 426 residential units that could yield anywhere from $500 million to $660 million in sales when completed and sold.
The Irvine Planning Commission will discuss the proposed housing project at its Sept. 18 meeting. The Business Journal’s estimated sales figure is based on current median prices that range from $1.2 million to $1.55 million for a condominium unit in Irvine.
Von Alton I LLC, which is affiliated with Irvine-based private equity firm IRA Capital LLC, filed an application with the city of Irvine to build the 426 for-sale condominiums on a 25.4-acre site at the northwest corner of Alton Parkway and Von Karman Avenue.
The project implies almost 17 homes per acre.
The office campus, currently called the Von Karman Corporate Center, is part of the Irvine Business Complex (IBC). IRA Capital wanted to repurpose the site for two warehouses totaling 541,344-square feet at 2121 Alton Parkway and 16715-16969 Von Karman Ave.
However, the city balked, saying too much industrial was being built in the city and pushed for housing even though the land wasn’t entitled for that use. To avoid potential litigation, the city’s former manager came up with an option.
Under the City Council-approved Option Agreement, if the city fails to process timely and approve the residential project, the city has the option to purchase the VKCC project site for $317.5 million if it does not want IRA Capital to proceed with the previously approved warehouse project.
That’d be equivalent to paying $745,000 per house, or $12.5 million per acre, an unheard-of price for an infill site in the IBC.
Land entitled for warehouse development in the IBC has been trading for $4 million to $5 million an acre.
Von Alton has since filed its proposal with the city. Irvine Subdivision Committee reviewed the proposal on Aug. 27 and advanced the plans to the Planning Commission.
Project Master Plan
Von Alton’s submitted master plan for the project shows a mix of four housing types to offer to prospective buyers: duets, single-family detached, townhomes and stacked flats.
Duets are three-level attached duplexes with three- and four-bedroom plans ranging from 1,833 to 2,203 square feet. Von Alton proposed 76 duet units.
Up to 93 single-story detached houses would be built, each one being three-level condominium units with three- and four-bedroom plans and 1,674 to 2,150 square feet.
Three-level townhomes would be built in clusters of four to 10 units per building. Most of the project’s unit mix—191—would be townhome-style condominiums. The units would be two or three bedrooms and range from 1,357 square feet to 1,665 square feet.
Also proposed are 66 stacked flat units, with one to three bedrooms ranging from 712 to 1,442 square feet in size. Each stacked flat building would be three floors high with 11 units.
“All units are for-sale residential condominiums. The various products and residential units are connected via a network of pathways and walkways, with unit clustering organized to provide active and passive courtyard spaces between the buildings,” Irvine city staff said in a report to planning commissioners.
Von Alton would also pay the city a $6.7 million community park in-lieu fee and $7.2 million affordable housing in-lieu fee.
IRA Capital and VKCC
Von Karman Corporate Center, or VKCC, is currently home to nine existing office and industrial buildings. Office is the largest use, with 440,397 square feet of space. There are also 13,271 square feet of industrial use and a retail tenant occupying 400 square feet.
The nine-property VKCC portfolio was bought by IRA Capital, which also operates as Von Karman I LLC, for $102.4 million in January 2023.
Blackstone Inc. had owned the portfolio as part of its Blackstone Real Estate Partners VIII fund.
IRA Capital operates as a private equity firm with a focus on alternative investments with an overweight on the medical/healthcare real estate sector. It invests its own capital and on behalf of co-investment partners that include pension funds, institutions, family offices, and individuals.
It has completed $3.5 billion in investment involving 138 properties with 10.2 million square feet acquired, according to its website.
IRA Capital was founded in 2010 by partners Amer Kasm, Samir Patel, Jay Gangwal, Amer Malas and Mohannad Malas.
All five have extensive real estate experience and involvement in Orange County, including Mohannad Malas, who is a trustee at the UC Irvine Foundation, a founding board member of the UCI Beall Applied Innovation and the Mission Hospital Foundation.
Among its more notable local projects was the 450,000-square-foot office of Von Karman Creative Campus in Irvine and the prior headquarters of Anduril, a 150,000-square-foot facility at the corner of Michelson and Jamboree.
The firm didn’t return the Business Journal’s requests for comments.
Abandoning Industrial Plans
The city has been under pressure because of a law Gov. Gavin Newsom signed last year.
Assembly Bill 98 established a minimum amount of distance between residential properties and new warehouses.
AB 98 would begin regulating warehouse development and trucking activities associated with logistics beginning Jan. 1, 2026. Those new regulations establish truck routes that avoid residential areas and buffer zones between warehouses and housing, parks and schools.
Analysis of AB 98 shows the new law aims to reduce emissions and improve public health, but the increased regulations could be burdensome for warehouse operators.
The Irvine City Council, in a separate action, rezoned the IBC area late last year, allowing for as many as 15,000 homes to be built in an area dominated by commercial properties.
That rezoning was approved nearly 18 months after city council members looked into managing the effects of large-scale warehouse and logistics projects within the city.
