Shopoff Realty Investments has sold a roughly 10-acre lot in Fullerton that currently holds a shopping center to homebuilder Lennar Corp. (NYSE: LEN) for $49 million, property records indicate.
Shopoff in January won approvals for a 113-home project on the site, located on the corner of Euclid and Rosecrans.
Miami-based Lennar, which has its West Coast base in Irvine, is staying true to those entitlements with plans to build 49 single-family homes and 64 townhomes on the site, currently a neighborhood shopping center called Sunrise Village.
Lennar’s project is called The Pines.
“We’re very pleased to get this project into good hands that will provide some much-needed housing stock into this community,” Shopoff Realty CEO Bill Shopoff told the Business Journal.
Lennar’s project is among the largest single-family housing developments in the works for the city, which has been working to up its inventory in recent years as part of city and state requirements.
Shopoff Profits
The sale marks a sizeable profit for Shopoff, which acquired Sunrise Village for $27.5 million in 2021.
The center had “suffered the impacts of pandemic-induced recession” prior to its purchase, officials said.
Sunrise Village, which spans 14 acres, is anchored by a CVS.
Dream ERE: Real Estate, a real estate investment firm, bought a corner of the shopping center for $3.9 million in September. That sale included a ground lease for Del Taco and the three-tenant retail pad occupied by Papa John’s, Sunrise Optometry and Coffee Code.
Shopoff Realty still has about 2.7 acres of land available for sale at Sunrise Village, some of which is under contract.
‘Healthy’ Housing Market
Construction for The Pines is expected to take about 18 months, city filings indicate. Lennar has not disclosed a projected delivery date for the housing development.
The homebuilder last quarter saw a rise in deliveries from the year prior, up 8% to 18,559 homes.
New orders for Lennar also increased in the third quarter, up 37% to 19,666.
“The housing market is healthy overall, as supply remains tight, demand remains strong and buyers have become more comfortable with higher mortgage rates,” Lennar Co-CEO Jon Jaffe told analysts during a conference call last month.
Though Lennar’s financial results declined from the year prior, they surpassed the Zacks Consensus Estimate.
Revenue for the company totaled $8.7 billion, down 2.3% from the third quarter last year.
Shares in Lennar last week were $104.93 apiece, giving it a $30 billion market cap.
Fullerton Housing
Lennar’s project is currently the largest single-family on the books for the city of Fullerton, which saw its regional housing requirements increase in 2021, with the city required to have 13,209 housing units planned before 2029.
On the multifamily front, several projects are in the works for the city that may add nearly 1,000 units over the next few years.
City records indicate the largest apartment project in the works is the Hub at Fullerton, a 420-unit student housing development at 2703 E. Chapman Ave. The project is fully entitled but has yet to begin construction.
Another notable rental proposal is Streetlights Fullerton, a five-story apartment building with 329 units. The project is in its final review stages.
Tracks at Fullerton Station, a mixed-use, transit-oriented development that’s currently working through entitlements, proposes to add 140 rental units, a 124-room hotel and 3,570 square feet of retail and dining. That parcel recently sold to Westpark Investments and TA Partners.
Retail Redevelopment Boom
While Lennar is handling Sunrise Village’s rebuild, Shopoff Realty is heading a retail redevelopment of its own in Westminster.
The company earlier this year submitted a proposal to redevelop a portion of the 51-year-old Westminster Mall into a mixed-use community, called Bolsa Pacific.
The project, which spans 90 acres, will comprise of about 1,065 multifamily units, 102 three-story single-family townhomes, a 175-room hotel, a 2.5 acre park, a food hall and retail space.
The overhaul is one of many for Shopoff Realty.
“We are definitely in the business of buying additional shopping centers for redevelopment, there’s a lot of promise there,” Shopoff said.
The company also aims to revamp its existing retail properties, including the former Nordstrom at the Paseo Nuevo in Santa Barbara and at Stoneridge Mall in Pleasanton.
“Big-box retail is largely going to make way for smaller, more experiential retail” due to the rise of online shopping, Shopoff said.
