Another 174 homes are on the fast track for construction along Irvine’s Portola Parkway, the busiest street for new home development in Orange County.
Los Angeles-based KB Home recently closed on a large land buy at a new section in Irvine Company’s Portola Springs and is planning to have homes ready for sale there in a matter of months.
The single-family homes will be built in two neighborhoods to be branded as Sage and Garden Hill. Sage’s homes will run close to 2,000 square feet, while Garden Hill homes will go from about 2,600 square feet to nearly 3,400 square feet.
Pricing for Sage will start in the high $600,000s while Garden Hill homes will be priced over $1 million, according to KB Home Chief Executive Jeffrey Mezger.
It’s the largest new home development going up on Irvine Co. land in several years that’s not being built by the Newport Beach-based real estate owner’s in-house builder, Irvine Pacific LP, or financed by the company’s now-shuttered executive builder program.
“The two communities that we just acquired from Irvine (Co.) aren’t communities that any builder could come in and acquire,” said Mezger, speaking to analysts in the company’s most recent analyst call. “They’re a very relationship-oriented company. Frankly, they came to us first, because of all the great business we’ve done together over the years.”
The deal appears to be KB Home’s largest OC land purchase in several years. The builder—which has a market value of about $790 million—sold 72 homes here in 2011 and 142 homes in 2010, according to Business Journal records.
KB Home paid an estimated $15 million last year for an 11-acre site in Lake Forest’s Whisler Ridge, where 68 homes are going up.
Terms of the Irvine Co. sale weren’t disclosed, but Mezger suggested the price wasn’t cheap.
“What’s always interesting to me (is that) while there’s no question the housing markets are getting better, the land sellers figured it out first,” he told analysts. “So land prices are going up every bit as fast, if not faster, than home prices are.”
Just north of the two planned neighborhoods sits the high-end, 169-home Lambert Ranch development, which has seen strong sales since opening a few months ago.
In 2010 Aliso Viejo-based The New Home Co. paid a reported $50 million for the 50-acre, family-owned Lambert Ranch site, one of several North Irvine housing projects going up within a few miles of each other along Portola Parkway.
The initial housing project planned for the Great Park Neighborhoods also is in the early stages of development nearby, as likewise Irvine Co.’s Stonegate community.
Mezger said his company plans to build and sell houses at Portola Springs while the market’s hot.
“This is a great example of how quickly we can move to open a new community,” he said. “We closed in June, and in July we will be grand opening two communities with furnished models.”
The communities should generate “significant deliveries” in the fourth quarter of this year and for all of 2013, Mezger said.
Bella Buys
A second apartment complex near the Bella Terra shopping center in Huntington Beach has traded hands in a blockbuster sale in less than a month.
Essex Property Trust Inc., a Palo Alto-based apartment owner and developer, this month closed on the buy of The Huntington, a 276-unit low-rise complex at 8400 Edinger Ave., just off the San Diego (405) Free-
way.
The 202,000-square-foot complex traded hands for about $48.3 million.
The price works out to about $175,000 per unit, and $239 per square foot.
The Huntington was sold by San Francisco-based Friedkin Realty Group Inc., according to brokerage data.
Essex Property’s Huntington Beach buy follows on the heels of Beverly Hills-based real Kennedy Wilson’s $67.5 million acquisition of the nearby Via Verde complex, located about a mile away on the other side of the 405.
The Via Verde complex, at 15555 Huntington Village Lane, sold late last month for about $244,000 per apartment in OC’s priciest apartment sale so far this year.
Essex Property owns about 33,000 apartments in California and Washington.
Southern California makes up about 46% of the company’s income, according to regulatory filings.
Its most prominent local property is the Skyline at MacArthur Place in Santa Ana.
Essex Property expects to see rent growth of 25% in Orange County over the next four years, according to a recent investor presentation.
