The New Home Co. is closing in on the purchase of a nearly 130-acre, 1,200-home development site in Corona, one of several projects now in the works for the Aliso Viejo-based homebuilder following its recent initial public offering.
The company, which became the fourth publicly traded builder based in Orange County after raising $86 million in its IPO in January, is under contract to buy Arantine Hills, a proposed masterplanned development on the southeastern edge of Corona.
It expects to pay about $74 million for the land, according to regulatory filings. The deal is expected to close by the end of the year.
The site is owned by a Temecula-based land owner and managed by Bluestone Communities of Rancho Santa Margarita.
The 276-acre property—which includes other land entitled for commercial and mixed-use development—was listed for sale last summer by the Irvine office of brokerage Land Advisors Organization.
The New Home Co. is expected to pay about $571,000 per acre for the 130-acre residential portion of the property.
The project would be the largest to date in terms of units for the company, according to Chief Executive Larry Webb.
With the Corona site, the company would own or control about 5,500 home lots in California.
“Finest Site”
“This is a great project for us,” Webb said. “It’s the finest site in Riverside County (to be offered for sale) in 10 years.” Arantine Hills is near the intersection of the 15 Freeway and Cajalco Road, and is
next to the Eagle Glen masterplanned community. It’s about 30 miles from John Wayne Airport.
The company is in talks with potential joint venture partners to buy the lots and fund the residential portion of Arantine Hills.
New Home Co. plans to eventually sell some of the home lots to other builders but remain the master developer for the project, which is expected to target first-time homeowners and move-up buyers.
The plan currently calls for Arantine Hills to open in mid-2016, Webb said.
The Corona project comes amid a busy period of construction for The New Home Co., with a number of its upcoming projects located closer to home.
The company expects to open 14 communities over the next year and a half—including projects in Irvine, Newport Beach, San Juan Capistrano, Calabasas and Thousand Oaks, according to Webb.
“That’s the big story for us,” he said. “The IPO has given us the money to start a lot of these projects.”
Shares of the company have risen nearly 35% since the IPO, giving New Home Co. a market valuation of about $250 million.
Projects under way in Irvine include two slated to open for sale this spring in the new Orchard Hills development.
New Home Co. also has a deal with Newport Beach-based Irvine Company to build more than 800 homes at Orchard Hills and other projects under a fee-building arrangement for the developer’s in-house builder, Irvine Pacific.
In Newport Beach, the company this month held a topping-off ceremony for its high-end Meridian condo project, where homes are expected to sell for $2 million and up.
Meridian, located next to the Newport Beach Marriott Hotel & Spa and Fashion Island, will only hold 79 homes—relatively small compared to other New Home Co. developments—but the project has an outsized importance to company executives.
“This is our most important project,” said Tom Redwitz, chief operating officer of the builder, which is developing Meridian in a venture with Hillwood West, a unit of Ross Perot Jr.’s Dallas-based Hillwood.
The company’s 169-home Lambert Ranch development in Irvine, which sold out last year, laid the groundwork for the builder’s growth over the past four years, but Meridian carries additional weight due to its location in Newport Center, officials said.
“We will never have a more visible project,” Webb said.
Sales at Meridian haven’t officially kicked off, but the builder has already inked a handful of sales contracts, according to Joan Marcus-Colvin, New Home Co. senior vice president of sales, marketing and design.
All but one of the early buyers are locals, she said.
The 4.3-acre Newport Beach project, whose tallest building is five stories, should have models open around October.
Also slated to open this summer is Oliva, a single-family project off Del Obispo Street in San Juan Capistrano, where homes will be as large as 5,300 square feet.
The project was initially expected to
hold 31 homes, but the company is now in talks with the city to expand it by another nine high-end homes on land next to the initial development site, according to city filings.
