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Saturday, Mar 25, 2023

Spotlight: Donald Bren

Apartment Holdings, Rare Sales Boost Irvine Co.

Donald Bren, the country’s wealthiest real estate owner, is rarely in a selling mood.

That changed in 2022, with Irvine Co. closing a pair of notable Southern California commercial real estate sales totaling more than $470 million.

In May, a venture headed by Douglas Emmett Inc. (NYSE: DEI), a large apartment investor in the Los Angeles area, paid $330 million for 1221 Ocean Avenue, a 120-unit Santa Monica apartment complex overlooking the beach that has counted celebrities and other high-end Hollywood types as residents over the years.

It’s among the largest reported sales for the Newport Beach-based real estate firm in its history.

The deal works out to about $2.75 million per unit and is the priciest apartment sale for a larger-sized California apartment, on a per-unit basis, according to industry data.

Rents average a sky-high $15,000 per month at the 16-story tower, records indicate.
Irvine Co. paid a reported $44.1 million for the Santa Monica property in 1998; it wasn’t seen as a core holding of the company, whose apartment portfolio now tops 125-plus properties and 65,000 units.


Hotel Transactions

In February, Irvine Co. entered into a ground lease transaction for the Fashion Island Hotel in Newport Beach for $143.6 million. The deal works out to a price of about $487,000 per room for the 295-room property, which next year will reopen as the Pendry Newport Beach under its new ownership.

Another hotel sale, for the 536-unit Hotel Irvine is expected to close in the coming months and is likely to push Irvine Co.’s disposition total for 2022 well over the $600 million.

Outside of homebuilding sites, homes sold under the company’s Irvine Pacific unit and older rental complexes it has sold to developers and other property owners, Irvine Co. has rarely been a seller in recent years.


Modest Boost

Continued growth in rents for Irvine Co.’s thriving apartment division—now its largest source of revenue—gives the Business Journal confidence in boosting Bren’s wealth estimate this year, despite issues facing other product types and larger economic issues.

The estimate for 2022: $18.2 billion, a modest 1% boost from a year ago, and the Business Journal’s highest valuation to date for Bren, who continues to actively run the company. Other national estimates place Bren in the $16 billion range.


Donald Bren


THE WEALTH: Bren heads Orange County’s largest real estate company, with one of the largest portfolios of apartments and offices in California, among other notable holdings. The company’s holdings consist of 127 million square feet and include more than 570 office buildings, 125 apartment communities with 65,000 units, 40 retail centers, one coastal resort, one hotel, three golf courses and five marinas.

Properties are primarily located in OC, with about 35% of the portfolio in Silicon Valley, San Diego, West Los Angeles, Chicago, and New York City.


BIG BREAK: Bren got his start as a homebuilder in 1958. In 1977, he was part of a group that purchased Irvine Co. from the founding family, the successor to the 93,000-acre ranch bought by James Irvine in 1864. Bren bought out most of his partners in 1983. Became sole owner in 1996.


LOCAL HOLDINGS: Fashion Island, Newport Center, half of 185-acre UCI Research Park in Irvine, Jamboree Center, MacArthur Court, the Resort at Pelican Hill, and large parts of the 5,000-acre Irvine Spectrum.


PHILANTHROPY: Bloomberg Businessweek magazine ranks Bren as one of the country’s most generous philanthropists, estimating his lifetime giving at more than $2.1 billion. Over $265 million of that went toward education. He’s directed more than $70 million to the University of California, Irvine, in addition to giving to other schools. Bren also set aside 57,500-plus acres—more than half of the 93,000-acre Irvine Ranch—as open space and parklands in perpetuity. The U.S. Department of the Interior and the state formally designated the lands as Natural Landmarks. In 2014, Irvine Co. donated 2,500 acres of land in Anaheim Hills and East Orange where it once planned more than 5,000 homes. The land will be permanent open space.


Out-of-This-World Investment


In August 2021, Pasadena’s California Institute of Technology disclosed the institution has been gifted more than $100 million by Donald Bren, a university Life Trustee, to develop technology to collect solar power in space and beam it back to Earth. The endowment was made anonymously in 2013.

“I have been a student researching the possible applications of space-based solar energy for many years,” Bren said in a statement at the time the gift was revealed.
The institution said Bren became interested in the subject after reading an article on the topic in Popular Science magazine.

“My interest in supporting the world-class scientists at Caltech is driven by my belief in harnessing the natural power of the sun for the benefit of everyone,” Bren said.
The institution said last year it was aiming to unveil early-stage prototypes at some point in 2022.

Bren “has brought the same drive and discipline that he has demonstrated with master-planning communities to the Space Solar Program,” said Caltech President Thomas Rosenbaum. “He has presented a remarkable technical challenge that promises a remarkable payoff for humanity: a world powered by uninterruptible renewable energy.”

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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