Irvine-based Tri Pointe Homes Inc. has bought a long-stalled housing development in La Habra, in one of its larger local purchases to date.
The homebuilder—formed in 2009—recently closed on the former Brio housing project at 300 S. Euclid St., one of several Orange County projects it has in the works.
The nearly 11-acre infill development project, located a few blocks from La Habra Boulevard on a former cold-storage facility site, traded hands for about $10 million, according to real estate sources. The land is entitled for 91 single-family homes and includes three already-built model homes.
The project has been in hiatus for almost four years. Its initial developer, John Laing Homes, abandoned the project after going bankrupt.
Tri Pointe is planning to tweak the sizes of the homes planned at the site and will probably rename the project as well, said Doug Bauer, Tri Pointe’s chief executive. Pricing is now expected to start around $400,000 per home.
2013 Sales
The goal is to begin land improvements at the project—located at Euclid Street and 2nd Avenue—this summer. Sales are targeted to start in early 2013, he said.
By house count, the project stands to be among Tri Pointe’s largest in OC since the company’s inception almost three years ago.
The company, which has financial backing from Greenwich, Conn.-based Starwood Capital Group Global LP, has sold close to 100 homes in OC since that time, primarily in Irvine’s Woodbury community.
It’s also selling homes in 10 or so other neighborhoods across California, including projects in Oceanside, San Jose and Riverside. A new, high-end project in Silicon Valley, called Chantrea at Silver Creek, had its grand opening during the April 14 weekend.
The goal—assuming the housing market continues its recovery—is to have the company building 1,000 homes per year within five years, said Bauer, the former president and chief operating officer of Newport Beach-based William Lyon Homes. He started Tri Pointe with two other ex-Lyon colleagues, Mike Grubbs and Tom Mitchell.
Tri Pointe was one of nine builders recently tapped to build the first batch of homes planned at Sendero, the 690-acre project along Ortega Highway in South County whose plans were first announced by Rancho Mission Viejo LLC last month.
The company is expected to build about 105 of the first 940 homes planned at Sendero, which has extensive ground work under way at Ortega Highway and Antonio Parkway.
Bauer said his company also is in escrow to buy two former school sites in Huntington Beach from the Fountain Valley School District. The former Lamb and Wardlow elementary school sites total a little more than 20 acres and could hold 130 or so homes.
The sale could close escrow around the end of the year, after entitlements for the two sites are completed, Bauer said.
School district documents filed last year show the sale price for the Huntington Beach land to be about $35 million.
Abandoned
Tri Pointe is the third local builder to be involved in the Brio development since 2005, when one-time Irvine-based builder John Laing Homes bought the land for the project.
John Laing Homes built the three model homes at the site and held a grand opening for the project in mid-2008 but never moved ahead with sales as the housing market slumped.
John Laing Homes filed for bankruptcy in 2009 and abandoned the project. Costa Mesa-based Warmington Group was brought on to manage the project for the site’s lenders during the bankruptcy, though no new housing construction at the site moved ahead under its watch.
It should cost about another $5.5 million to complete the project, according to marketing materials from the Irvine office of land brokerage Land Advisors Organization, which helped sell the lender-owned property for 300 S. Euclid Street LLC.
Regulatory filings show the LLC to be a subsidiary.
Tri Pointe aims to stay within the building footprint and existing architectural style previously approved by the city of La Habra, according to the city.
John Laing’s vision for the project included homes running from 1,600 to 2,000 square feet with three and four bedrooms. At the time of the project’s 2008 grand opening, home prices were expected to start at around $500,000.
Design Revisions
Tri Pointe plans to revise the design of the homes, which should average about 1,700 square feet—slightly smaller than Laing’s plans, Bauer said.
The La Habra sale is among several land deals closed recently by Land Advisors, whose Winn Galloway, Mike Hunter and Allison Rawlins worked on the Brio sale.
The uptick in activity “hints at turning a corner in the land market statewide,” said Tom Reimers, California division president for the brokerage.
“After a 40% statewide drop in land transaction volume and consideration from the first half of 2011 to the second half of 2011, the broad-based increase in activity is a welcomed sign,” Reimers said.
