Landsea Homes Corp. paid $52 million for a pair of retail properties in Surf City, saying there is ample interest in turning them into residential homes.
“There is very high demand for homes in coastal OC, while there is low supply,” Landsea Southern California Division VP Tom Baine told the Business Journal. The area “is a very desirable place to live.”
The firm, which was one of Orange County’s fastest growing homebuilders prior to its headquarter’s move from Newport Beach to Dallas, is building 129 townhomes on the 6.3-acre site at 7225 and 7227 Edinger Ave.
Development for the residential community has already begun. Landsea is currently demolishing the site’s existing two retail buildings, which span a combined 109,348 square feet.
“We’re starting grading very soon,” Baine said.
The purchase is the company’s first in the city, though half of Landsea’s Southern California projects are in OC. The remaining half are in the Inland Empire.
Pricing for the Huntington Beach project, dubbed Essex + Gage, begins at around $1 million per home. Each unit will comprise of three stories, with floor plans ranging from 1,097 square feet to 2,516 square feet. Landsea is promoting the homes as “all-electric,” and sales are expected to begin in April.
“We plan to start on the model homes in November,” Baine said. “We’ll probably have the first home closing in June or July.”
Landsea as of last December owned or controlled 11,176 lots across California, Arizona, Colorado, Florida, New York and Texas.
Landsea, which began in 2013, is the homebuilding arm of China real estate company Landsea Group. The company was begun by John Ho, who was working as a commercial real estate consultant for Jones Lang LaSalle (JLL) when Landsea asked him to start its American unit. Analysts expect the company’s sales to climb 19% this year to $1.4 billion.
The company moved to Dallas last year, saying it wants to build more homes in Texas.
Its shares have fallen almost in half since March to $8.44 and a $305 million market cap (Nasdaq: LSEA).
Walkable Selling Point
Essex + Gage is walking distance from Huntington Beach’s Bella Terra shopping center.
“Logistically, it’s a great location,” Baine said. “Our future homeowners can walk to nearby restaurants, which is what people want nowadays.”
In an increase from prior years, half of the respondents to the 2023 National Association of Realtors Community and Transportation Preferences Survey said they prefer a walkable community and shorter commute, even if it means living in an attached home.
Additionally, the Essex + Gage site is less than two miles from the San Diego (405) Freeway and Beach (39) Boulevard highway junction, which is convenient for work commutes, Baine added.
On-site amenities offered to Essex + Gage residents include pool and spa, outdoor barbecue and firepit area, public open space with a dog park and turf area.
The retail buildings currently being demolished on the Essex + Gage site were built in 1970 and 1982, respectively.
The land’s seller, Orange-based firm Freeway Industrial Park, in 1993 bought the site’s larger, 97,640-square-foot property for $1.65 million.
Tenants of the building included West Coast Living Thomasville Furniture, recreational center Glowzone and Off the Wall Social arcade.
Landsea’s Huntington Beach acquisition follows the company’s recent purchase of 44 homesites in Anaheim.
Pricing for that deal was undisclosed.
The company has already commenced development on the community, called Mason. Similar to Essex + Gage, Mason will comprise of three-story townhomes. Officials project sales to start this year.
Across the street from Mason is Landsea’s 65-home Nolin community, which sold out in less than two years and “experienced unprecedented demand,” Baine said.
Other OC communities by Landsea include Avelina in San Juan Capistrano and Hudson in Placentia, which still have a few homes available sale.
