Strong sales at the recently opened Lambert Ranch development in Irvine have given its Aliso Viejo-based developer confidence to look for more homebuilding projects in the area.
“In the next two years, we could have five or six projects under construction” in Orange County, said Larry Webb, chief executive of The New Home Co., the developer of the 169-home Lambert Ranch project that opened earlier this summer along Portola Parkway in North Irvine.
Sales at the 50-acre gated community—with starting prices averaging more than $1 million—have exceeded the company’s already-formidable expectations, according to Webb.
“When we started, no one was selling one house a week (per community),” Webb said. “We wanted to sell even more.”
About 65 homes have sold since Lambert Ranch’s model homes opened in April—nearly all that have been put on the market so far.
“It’s been the best-selling project (in California) at this price point over the past few months,” Webb said. “We’ve seen more than $80 million of revenue in three months.”
Lambert Ranch’s first residents are expected to move in next month.
“This project gives us credibility,” said Webb, the former chief executive of Irvine-based John Laing Homes, who founded The New Home Co. about three years ago with Chairman Joe Davis, Chief Financial Officer Wayne Stelmar and Southern California President Tom Redwitz.
The company is expected to break even this year, and should be “very profitable” in 2013 as Lambert Ranch finishes up sales and other new projects move forward, Webb said.
“I think (the market) is going to get better, but we don’t need things to improve (to be profitable), we just need it to remain where it is,” Webb said.
The builder paid a reported $50 million for the Lambert Ranch property, a family tract of raw and farm land, in 2010, its largest deal to date.
The goal now is to start tracking down other sites in OC, and other California markets, for other projects.
“About six months ago, we (decided) that now is the time to be finding projects that will be hitting the market in mid-2013 to 2015,” Webb said. “We’re still being really selective—we want (projects) where we’ll be rewarded for thoughtful planning.”
The company is under contract to buy a 4.25-acre parcel of land near Fashion Island in Newport Center, a site next to the Newport Beach Marriott Hotel & Spa, where it would build 79 upscale condos.
The land, located a few blocks from Jamboree Road along Santa Barbara Drive, now counts a shuttered eight-court tennis club, which would make way for the condo project.
The company hopes to close on the sale—first reported by the Business Journal in May—by mid-December, with ground-breaking next year, Webb said.
“It will be the most interesting project we’ve ever done,” Webb said.
Plans tentatively call for the homes to range in price from $1.5 million to $4 million, making it one of the pricier condo projects ever seen in Orange County.
The company also is in talks with Newport beach-based Irvine Company for building homes at “three or four” projects planned by OC’s largest landowner, including a future phase of development planned at the community of Stonegate, according to Webb.
The New Home Co. also hopes to be selected by FivePoint Communities Management Inc. as one of the first builders for its first phase of its massive Great Park Neighborhoods project.
Groundwork for the first 726 homes planned by Aliso Viejo-based FivePoint is now under way less than a mile from Lambert Ranch, on land running between Portola Parkway and Irvine Boulevard.
Builder Selections
The first half-dozen or so builders for the first homes planned on the former El Toro Marine base land should be selected soon. Sales are expected to start next year.
“We’d like to do that,” Webb said.
The company’s preference is to take on the priciest homes planned in the Great Park’s first phase, he said.
The New Home Co. has its share of expensive homes under way or in the works in OC, but Webb notes that the company isn’t tied to higher-end developments.
The builder plans a 315-home project in the Santa Clarita Valley community of Valencia. Homes are expected to start around $250,000.
The Valencia project—also overseen by FivePoint—originally called for attached condos, but The New Home Co. reworked the plans to single-family detached homes, making them among the lowest-priced of any stand-alone homes in the region, Webb said.
The builder, which now counts about 80 employees, also has plans in the works around Sacramento and the Bay Area.
