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Saturday, Jun 15, 2024

Irvine Co. Plans 4,500 Infill­ Rentals

Irvine Co. is doubling down on its apartment development plans for the city of Irvine, with six projects totaling 4,500 units in the works across Orange County’s fastest-growing city.

The city of Irvine last week approved an early-stage plan from the company to move ahead with the projects, which will now go through the city planning and permitting process starting in early summer.

The memorandum of understanding proposed by Irvine Co. adds to prior plans disclosed by the company to develop 2,500 apartment units across three projects in the city, including a 1,261-unit project at the Market Place and two complexes in the Spectrum area of the city.

In the largest of the three new projects, Irvine Co. is planning a 1,459-unit project on a vacant site at its Discovery Park campus, a nearly 2 million-square-foot office park near the intersection of Sand Canyon Avenue and Laguna Canyon Road next to the Santa Ana (5) Freeway.

The site was once envisioned for offices; Irvine Co.’s pivot is a sign of the company’s focus on growing the stock of housing near OC’s job centers, specifically in the Spectrum area of Irvine, where the company has delivered several million square feet of offices that past few years.

“Few cities have the ability to master plan new communities next to Fortune 500 companies, innovative tech startups and world-class hospitals,” Senior Vice President Jeff Davis said in a statement.

“This framework agreement reflects that unique opportunity to meet the needs of Irvine’s workforce, businesses and residents,” Davis added.

Irvine Co. is both the largest apartment owner and office owner in the state, with some 65,000 rental units and 50 million square feet of offices. A majority of the privately held company’s properties are in OC.

Irvine Rents

The projects, according to the developer, will help the city adhere to a state mandate requiring the city of Irvine to deliver 23,600 new housing units by 2029, including 15,000 homes for those earning below the area median income.

State data showcases demand for such homes; an Irvine ZIP code had the second-most net move-ins of any in California between 2019 and 2022, according to U.S. Postal Service data. That wasn’t the case for the rest of the state, with 1 million more people moving out of California than into it during that time frame, data indicates.

The city is now the 13th largest in the state, and second largest in Orange County, with a population of about 310,0­00 at the end of 2021.

Irvine in 2021 passed Santa Ana in population, and only trails Anaheim, which counts about 341,000 residents, among OC cities.

Rent prices for Irvine are starting to show declines for the first time since the onset of the pandemic. At the start of this month, the average rent for a one-bedroom apartment in the city was $2,777, representing a 2% decline over the prior year, according to rental market tracker Zumper.

Affordability is a part of Irvine Co.’s latest apartment plans, with one project to be exclusively reserved for those making less than the area median income.

Of the 4,536 new units proposed, 1,025 units, or 23%, will be reserved for families making $40,000 to $120,000 per year, ahead of the 15% required by the city.

In another part of its framework with the city, Irvine Co. will invest north of $65 million in community benefit funds, to finance infrastructure, housing or other efforts headed by Irvine’s city council.

Offices, Homes

In the newest and largest of the proposals, Irvine Co. is planning up to 1,459 units on a vacant portion of the Discovery Park office campus, which counts 31 low and mid-rise offices on north of 38 acres.

Although numerous OC companies are in retrenchment mode in terms of office needs, the apartments near Irvine Co.’s job centers like Discovery Park could serve as an added amenity for employers looking to recruit and retain talent in the next decade, the developer believes.

Reimagined Market Place

Irvine Co. is also considering mixed-use opportunities in its housing plans.

The company got the city’s approval last year to move ahead with a General Plan Amendment application for part of the 79-acre Irvine portion of the Market Place, part of Orange County’s third-largest shopping center with $662.9 million in taxable sales for 12 months ended June 30, 2022.

The proposal joins mixed-use redevelopment plans in the works for other malls across the county, including Brea Mall, Main Place Mall, Westminster Mall and former Laguna Hills Mall, among other centers.

The Irvine side of the project has landed some notable tenants—including one of the first Amazon Fresh grocery stores in the country—though it’s also had a few high-profile closures, including a Bed Bath & Beyond that shuttered last year as part of that retailer’s retrenching.

The 1,261 apartments would replace a former Hobby Lobby and Barnes & Noble as well as a 24 Hour Fitness Center that’s being relocated to the center’s former Bed Bath & Beyond spot.

Spectrum Housing

Irvine Co. is also looking to increase housing inventory near another big Irvine shopping center.

It has proposed 896 units on two of the last undeveloped land parcels in the immediate vicinity of the Spectrum Center mall.

The two sites total approximately 10 acres near the intersection of Barranca Parkway and Pacifica, close to several other large rental complexes the developer has built over the past decade and a half.

The project is slated for hearings in fall 2023.

The developer also aims to add rentals to its Los Olivos development on the other side of the San Diego (405) freeway, with plans to build 600 units on a vacant, 10-acre site. It was once envisioned as a school site for the Irvine Unified School District, but the district waived its right to the site at the end of last year, turning the site back over to the Irvine Co.

100% Affordable

In the final proposal, Irvine Co. is considering a 100% affordable community totaling 320 units near Irvine’s train station.

The vacant site totals 4.7 acres on Technology Drive, adjacent to the SR 133 highway. Sources indicate Irvine Co. would likely partner with a nonprofit housing operator for this project, should it move ahead.

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