The aging Westminster Mall, an underperforming office tower in Santa Ana and four lots in Surf City will likely be home to thousands of new housing units as developers lean into state housing mandates.
Three redevelopment transactions have closed in recent days, including a 14-acre deal at Westminster Mall, where Shopoff Realty bought the former Sears, its parking lots and former auto shop on the southeast corner of the 90-acre property.
Shopoff bought the parcel from Seritage Growth Properties, a spinoff of Sears Holdings Corp., for $46.3 million. The Sears, an original anchor dating to 1974, closed in 2018.
Shopoff President and CEO William Shopoff said Friday that his firm sees an opportunity at the mall for a mix of for-sale and rental properties.
“We clearly think it has some viability to be repurposed into some residential as well as other uses,” he said. “There’ll be some offices on it, some retail, probably hospitality.”
The city’s housing element plan determined that some of the mall property could be rezoned for up to 2,550 housing units, 425 hotel rooms and possibly offices. The plan, which was adopted in January, states at least 245 housing units would be made affordable to lower- and moderate-income households.
Shopoff said his firm’s 14-acre chunk, which will grow to 27 acres after a deal closes to buy the Macy’s site, is “just one component of a much larger master plan” at the mall. The exact number of residential units and other uses for individual parcels has yet to be determined.
All told, Shopoff believes the process of planning and building any new housing or commercial spaces at Westminster Mall will take up to four years. And while the firm typically handles entitlements before selling properties to builders, Shopoff said he’s committed to a more long-term project.
“We’ve tried to change the position of what we do as a company and so we’re looking at this from a long-term position,” he said. “This is a generational asset as I consider it.
Surf City lots sold to joint venture
Five miles south of the mall in Huntington Beach, a joint venture by two housing developers has bought four parcels on 4 acres at 18700 Delaware.
Dolphin Partners in Irvine sold the property to North America Sekisui House, a master-planned community developer, and Holland Partner Group, a developer and operator of apartment complexes.
Terms of the deal, brokered by CBRE, were not disclosed.
The companies said they expect to build 335 units on the property. Details on entitlement and construction were not available.
The property, which includes parking lots between Florida and Delaware streets, is designated as one of six Regional Housing Need Allocation (RHNA) sites in the city.
CBRE reps said the land sits in a recently approved “affordable housing overlay” in the Beach and Edinger Corridors Specific Plan, which allows the development of the site. At least 20% of the units would be deemed affordable housing.
Empty offices bound for apartments
Pivoting to Santa Ana, a 10-story, Class B office building has sold for $11,800,000 and will be redeveloped into apartments, according to NAI Capital Commercial.
The 107,190-square-foot Broadway Building at 1600 N. Broadway was built in 1970 and renovated in 2007.
The office tower, which was about 30% occupied at the time of the sale, has a four-story parking structure attached to the building with roughly 280 parking spaces, according to NAI.
Steve Liu and Nikki Liu with NAI Capital Commercial’s Investment Services Group in Irvine represented the seller, Concourse COI Investment LLC, and buyer, 1600 N Broadway LLC.
“This was a tremendous opportunity for the buyer to purchase below replacement cost and to convert to apartments to satisfy the housing demand and shortage we are seeing in Santa Ana and throughout the state,” said Liu in a statement.
The new owner expects to convert offices into 100 to 105 units. The timing includes at least two years for the entitlement process and one year for construction, NAI said.
The housing redevelopment news comes a week after Irvine Company told the Register that it had proposed 2,500 new apartments at three properties in Irvine. If approved, 1,400 apartments would take the place of a stretch of The Market Place off Jamboree Road. Another 1,100 units would go on two empty lots north of Irvine Spectrum Center.
Rancho Cucamonga apartments sell to NB firm for $123 million
Another week, another big apartment complex has sold in the Inland Empire.
The 272-unit Camino Real Apartments in Rancho Cucamonga traded owners for $123 million or $425,205 per unit, according to Vizzda, a commercial real estate data provider.
The complex was sold by San Mateo-based Acacia Capital Corp. to a real estate investment trust managed by TA Realty in Newport Beach.
The 249,658-square-foot complex built in 2002 on 20 acres comes with detached garages and a mix of one-, two- three-bedroom units. Rent at the complex ranges from $2,270 for a one-bedroom, one-bath, 720-square-foot apartment up to $3,400 for a three-bed, 1,312-square-foot unit, according to Apartments.com.
This is the second big apartment complex in San Bernardino County to sell for more than $100 million in recent weeks.
In early June, Waterton Residential paid $310 million for the 736-unit Terracina apartment complex, now called Citrine Hills.
Investors have been on a spending spree, steadily scooping up multifamily properties in the Inland Empire as tenants shifted east to lower-cost housing during the pandemic.
Other recent deals include the Foothill Ridge Apartment Homes complex, a sprawling, 29-building complex in Upland, which sold on June 14 for $82 million. Also in Ontario and just 3.5 miles west of Citrine Hills, the ReNew Mills apartment complex also sold in June for $45.6 million, according to CBRE.
The tenant migration means vacancy rates have sunk to record lows not seen in 20 years, according to a compilation of Southern California rent data from three apartment indexes. Inland Empire asking rents for vacant units in the first quarter of 2022 climbed 17.4% from early 2021 to a record-high average of $1,941.
Former Marriott opens as VEA Newport Beach
VEA Newport Beach is open for reservations at the former Newport Beach Marriott Hotel & Spa.
The hotel, also operating under the Marriott banner and owned jointly by Eagle Four Partners and Lyon Living, underwent a complete remodel of its 400 rooms and common areas.
Updates included newly designed guest rooms, two new suite categories, three restaurant and bar concepts, a spa and fitness center. The outdoor and event spaces, plus the pool, also got makeovers.
The hotel also includes three eateries under chef Andrew Arndt: VIEW Restaurant & Lounge, Elan Café & Bar and Edge Pool & Bar.
Address: 900 Newport Center Drive. For more information go to veanewportbeach.com.
New mortgage venture for Landsea
Newport Beach-based Landsea Homes has launched Landsea Mortgage operated by NFM Lending, a multistate residential lender.
“The launch of Landsea Mortgage gives our valued Landsea Homes customers the opportunity to enjoy a streamlined and full-service loan process with superior customer service,” Mike Forsum, president and chief operating officer of Landsea Homes, said in a statement.
For more information, go to LandseaMortgage.com.
On the move
Irvine-based KSL Resorts has appointed Kit Pappas as its vice president of asset performance for its eastern division. He will oversee operations of KSL Resort’s East Coast portfolio, including Camelback Resort and Blue Mountain Resort – both in the Pocono Mountains in Pennsylvania.
Real estate transactions, leases and new projects, industry hires, new ventures and upcoming events are compiled from press releases by contributing writer Karen Levin. Submit items and high-resolution photos via email to Business Editor Samantha Gowen at [email protected]. Please allow at least a week for publication. All items are subject to editing for clarity and length.