Aliso Viejo-based developer Shea Properties is ramping up growth plans after pulling out of one of the county’s largest redevelopment projects as it rode out the worst of the commercial real estate downturn.
The company, a unit of Walnut’s J.F. Shea Co. and one of the area’s larger developers during the last real estate boom, saw some of its largest projects put on hold or canceled in the past few years. Among the shelved projects was the redevelopment of Tustin’s former Marine base.
Now Shea, a developer of offices, industrial space, apartments and stores, is starting to go on the offensive again, according to Chief Executive Colm Macken.
The developer is adding offices and executives in preparation for a return to development, he said.
“We’re starting to gear up for the future,” Macken said. “I think we’re at the beginning of the next wave (of development), but (growth) won’t be as fast as before.”
As part of the gearing up, Shea recently hired Bryan McGowan to be its new chief operating officer and chief financial officer.
McGowan previously was a managing principal at Newport Beach-based developer Koll Company. He’ll be heading up finance duties at Shea.
For the time being, Shea’s financing projects it’s working on using its own money. But with McGowan’s fundraising experience, the developer could start seeking outside financial partners, according to Macken.
“That might be a route going forward,” he said.
Projects
Among new developments, Shea recently announced plans to start construction at Mercado del Barrio in San Diego’s Barrio Logan neighborhood.
The project, estimated to cost $80 million, is slated to include a 92-apartment complex and nearly 84,000 square feet of shops, anchored by a 36,000-square-foot grocery store by Anaheim-based Northgate Gonzalez Markets.
The nearly 7-acre project is slated to be done in the second half of 2012. Plans for the long-delayed development initially were proposed in the 1980s. Shea entered the picture a few years ago with Carlsbad-based Chelsea Investment Corp.
In Oxnard, Shea is moving ahead on a 272-apartment complex. In Denver, another 288-unit project is going up this year. Two more projects, totaling about 600 apartments, are in the pipeline, according to Macken.
“We’re a lot more bullish out there about commercial real estate in general, and especially the apartment business,” he said.
The developer recently hired J.J. Abraham as head of acquisitions and development for its apartment division.
Abraham, a Shea senior vice president, has 17 years of development and acquisitions experience, including at Foster City-based apartment developer Legacy Partners Inc. and more recently at Del Mar Development, a resort developer in Mexico.
Shea owns about 6,300 apartments and has another 6 million square feet of office, industrial and retail space.
Among retail developments, the company’s working on a Target store in Oxnard. That 150,000-square-foot project, part of the 600,000-square-foot Collection at RiverPark development, should open this summer.
Shea’s looking to expand in Western Ventura County as well as Los Angeles, Macken said. The developer recently opened an office at Downtown L.A.’s Figueroa at Wilshire tower.
OC
In Orange County, Shea has land near its Aliso Viejo headquarters that could support another 400,000 square feet of office and other commercial development. For now, there are no plans to move ahead on any projects in Aliso Viejo, Macken said.
Last year, Shea, sister company Shea Homes and the city of Tustin ended a development pact for Legacy Park, an 820-acre project that takes up about half of the city’s former Marine base, due to the slow real estate market and a disagreement over a development timetable and the value of the land.
Tustin officials told the Business Journal late last year that the city’s been “bombarded” with developer interest about parts of the land since the prior deal with Shea ended.
At the time, the city hadn’t decided whether to try working with one large master developer again or to negotiate with several smaller developers for individual parts of Legacy Park.
The city’s now considering acting as its own master developer, financing needed early work and selling off 10 or so parcels to interested developers.
Tustin’s City Council is expected to take up matters on a plan soon.
