It was a year of big moves in the local real estate industry.
Over the past 12 months, FivePoint Communities and its main backer, Lennar Homes, announced they’re moving next year from offices in Aliso Viejo to the new Broadcom campus in Irvine.
Broadcom, which sold the campus to FivePoint and signed a 20-year lease agreement, started moving there in November.
California Gov. Jerry Brown speaks before signing a number of bills to help address housing needs Friday, Sept. 29, 2017, in San Francisco. With one of the nation’s most expensive cities as his backdrop, Gov. Brown signed legislation Friday aimed at tackling California’s growing affordable housing crisis. More than a dozen bills make up the package Brown will sign outside a San Francisco affordable housing complex. (AP Photo/Eric Risberg)In this photo taken Wednesday, Aug. 16, 2017, sheet metal worker Benjamin Voget prepares to install a gutter on a home under construction in Sacramento, Calif. Gov. Jerry Brown and Democratic legislative leaders promised to tackle California’s housing crisis in the final weeks of the legislative session by pushing a package that includes money for low-income housing and regulatory reforms. Lawmakers say the housing shortage is affecting people throughout the state at nearly all income levels. (AP Photo/Rich Pedroncelli)Developer Mike Harrah’s plan, dubbed “Orange County Silicon City,” includes a beefed-up proposal for redeveloping the Orange County Register’s recently vacated 20-acre site on Grand Avenue, along with his still unbuilt One Broadway Plaza tower a mile away in downtown Santa Ana. It also calls for the redevelopment of the 102-acre Willowick Golf Course on Santa Ana’s western edge. A light rail currently under development, the OC Streetcar, eventually would link all three sites, just over 3 miles apart. In all, the project would provide 5.7 million square feet of office space, 2.4 million square feet of retail and restaurants, 400 hotel rooms and nearly 4,500 apartment and condo units. (Courtesy of Gensler)Developer Mike Harrah’s plan, dubbed “Orange County Silicon City,” includes a beefed-up proposal for redeveloping the Orange County Register’s recently vacated 20-acre site on Grand Avenue, along with his still unbuilt One Broadway Plaza tower a mile away in downtown Santa Ana. It also calls for the redevelopment of the 102-acre Willowick Golf Course on Santa Ana’s western edge. A light rail currently under development, the OC Streetcar, eventually would link all three sites, just over 3 miles apart. In all, the project would provide 5.7 million square feet of office space, 2.4 million square feet of retail and restaurants, 400 hotel rooms and nearly 4,500 apartment and condo units. (Courtesy of Gensler)This image shows what Amazon’s second headquarters could look like if the tech giant decides to come to Irvine. (Courtesy of City of Irvine)Developer Mike Harrah’s plan, dubbed “Orange County Silicon City,” includes a beefed-up proposal for redeveloping the Orange County Register’s recently vacated 20-acre site on Grand Avenue, along with his still unbuilt One Broadway Plaza tower a mile away in downtown Santa Ana. It also calls for the redevelopment of the 102-acre Willowick Golf Course on Santa Ana’s western edge. A light rail currently under development, the OC Streetcar, eventually would link all three sites, just over 3 miles apart. In all, the project would provide 5.7 million square feet of office space, 2.4 million square feet of retail and restaurants, 400 hotel rooms and nearly 4,500 apartment and condo units. (Courtesy of Gensler)Willowick Golf Course: The 89-year-old, 18-hole course along the Santa Ana River would be reduced to nine holes, with new buildings occupying much of its open space. The plan includes 2 million square feet of office, 3,000 apartments, a 200-room hotel, retail and restaurants. (Courtesy of Gensler)FivePoint Communities CEO Emile Haddad celebrates on the trading floor of the New York Stock Exchange on Wednesday, May 10, as the firm debuts as a public company. (Photo courtesy of the New York Stock Exchange)FivePoint CEO Emile Haddad said FivePoint already is doing the most it can on-site with today’s technology to reduce greenhouse gases. “Our goal was to get to net zero,” he said. “To get to net zero, we had to go to the other incrementalÊmitigationÊ(off-site. (File Photo by Sam Gangwer, Orange County Register/SCNG)Henry Segerstrom poses with sign announcing the construction of South Coast Plaza. (Courtesy of South Coast Plaza)The Orange County Treasurer-Tax Collector is auctioning a time share at the Riviera Beach Spa and Resorts located at 34630 Pacific Coast Highway in Dana Point, California, January 6, 2017. (Photo by Jeff Gritchen, Orange County Register/SCNG)The Orange County Treasurer-Tax Collector is auctioning a time share at Capistrano Surfside Inn located at 34680 Pacific Coast Highway in Dana Point, California, January 6, 2017. (Photo by Jeff Gritchen, Orange County Register/SCNG)The Orange County Treasurer-Tax Collector is auctioning a time share at the Marriott Newport Coast Villas located at 23000 Newport Coast Drive in Newport Beach, California, January 6, 2017. This is a balcony and steps leading from Laguna Surf to the sand. (Photo by Jeff Gritchen, Orange County Register/SCNG)The Palm Garden apartments in Tustin on Wednesday, July 5, 2017, has changed owners twice in the past 16 months, and tenants report getting two or three rent hikes since December, after the first sale. More rent hikes are likely as the new owner plans to upgrade the complex and renovate individual units. (Photo by Leonard Ortiz, Orange County Register/SCNG)Nellely Perez, 13, Anahi Perez, 3, and Joshua Perez, 11, walk back their two-bedroom, one bath apartment in East L. A. Their parents Carolina Rodriguez and Roberto Perez are fighting eviction and a 60 percent rent increase. (Photo by Ana Venegas, Orange County Register/SCNG)The Muller Co. in Irvine has formed a joint venture with an affiliate of Cerberus Capital Management to recapitalize the firm’s three office properties including the Orange Executive Tower in Orange, seen here. (Courtesy of The Muller Co.)William Lyon poses with his wife, Willa Dean, second from left, and two unidentified associates outside a the Rosewood housing development in an undated photo. (Photo courtesy of William Lyon Homes)William Lyon with his wife fo 46 years, Willa Dean Lyon, at a surprise party for his 90th birthday in 2013. Lyon, who recently ended his 63 career as a homebuilder, turned 94 last month. William Lyon Homes, the successor to a homebuilding firm he co-founded in 1954, ranked 20th in the nation last year in homes sold, according to Builder Magazine. (Register file photo)Show Caption of Expand
Orange-based American Advisors Group, the nation’s leading reverse mortgage lender, decided to move a portion of its operations to a bigger space in the Irvine Towers, having outgrown offices near The Outlets at Orange mall.
And the Orange County Register moved from its longtime corporate headquarters in Santa Ana to a rented office building near Angels Stadium in Anaheim’s Platinum Triangle.
It also was a year for big financial moves. FivePoint went public. Lennar is seeking to become the nation’s biggest homebuilder by acquiring No. 4 builder CalAtlantic, another firm with strong Orange County ties.
A Boston private equity firm moved to acquire a controlling interest in online real estate firm Ten-X for around $1 billion, according to a news report.
And three Orange County cities joined more than 200 other North American regions bidding to host the Amazon’s proposed new second headquarters, or HQ2.
Here are highlights of real estate’s biggest moves in 2017 — deals, projects started or completed, new laws, and more.
New bills address housing crisis: Google shows more than 75,000 hits on the search phrase, “California housing crisis.” A similar result was found in news archives at Lexis-Nexis, which showed the term had 257 hits on English-language news outlets this year alone.
In 2017, the California Legislature finally did something about it — or tried to.
Fifteen bills aimed at increasing the state’s housing supply while boosting affordable housing construction reached the governor’s desk in September. On Sept. 29, he signed them all.
“This is probably the biggest bill signing that I’ve ever seen because this deals with something so basic as shelter and how we live,” Brown said at the time.
The measures seek to cut red tape for developers, raise money for affordable housing and punish local governments that don’t do their share.
Key bills included two funding measures. A $75 fee on most real estate filings (apart from property sales) will raise an estimated $200 million to $300 million for affordable housing construction. A second measure puts a $4 billion housing bond before voters on next November’s ballot.
Other bills seek to streamline the approval process, bypassing city council or board of supervisor reviews in some cases, or creating special districts with expedited environmental reviews. Other measures seek greater local government accountability, requiring cities to maintain an adequate supply of land zoned for housing, with consequences for governments that fail to meet housing goals or that wrongfully deny low-density developments. A measure also passed reinstating inclusionary zoning rules, so cities can require developers to set aside a portion of new homes for low-income residents.
Critics and even some supporters said the legislative package is just the beginning. But these measures alone won’t solve the state’s housing shortage without further action in the future, they said.
Amazon HQ2 bids submitted: The Irvine Co. offered to spend $5 billion building a new headquarters for Amazon if the online retailer moves to Irvine. Santa Ana and Garden Grove leaders agreed to team up with real estate developer Mike Harrah to house Amazon at three Santa Ana sites: The former Orange County Register site, a planned but as yet unbuilt downtown skyscraper and at the Willowick Golf Course near the Santa Ana River.
And Huntington Beach and Long Beach officials offered unused portions of a Boeing campus, a vacant aircraft plant and Long Beach’s World Trade Center to house the future e-commerce operation.
They joined Riverside, San Diego and nine Los Angeles County contenders. Gov. Jerry Brown pledged his backing to help Amazon get hundreds of millions of dollars in state and local incentives should Amazon choose the Golden State as the site of its second home.
Amazon reported 238 cities and regions submitted bids in what the Seattle Times dubbed the “national prostrating sweepstakes.” Amazon promises its new “second headquarters” would be a game changer for the community it moves two, with 50,000 jobs paying $100,000 or more.
“Our company has the long-term real estate assets, capital resources and flexibility to deliver all your required work space with lease durations of Amazon’s choosing,” Irvine Co. Chairman Donald Bren wrote in a letter addressed to Amazon founder and CEO Jeff Bezos. “In essence, you would have a one-click shopping opportunity.”
A decision is expected sometime in 2018.
FivePoint goes public: FivePoint Communities, developer of homes surrounding the Orange County Great Park and two other California mega-projects, raised about $420 million from an initial public offering held in May on the New York Stock Exchange.
Soon after, FivePoint won Los Angeles County approval to start construction on its long-delayed, 21,500-home Newhall Ranch development near the Magic Mountain theme park. Earthmovers and graders started rolling in late October.
FivePoint buys Broadcom site: FivePoint then announced in August it was spending $443 million to buy the Broadcom office complex at the south edge of the Great Park and will move its headquarters there from Aliso Viejo next year. Lennar, which owns a 40 percent stake in FivePoint, also is moving its West Coast regional headquarters to the Broadcom campus. Broadcom, which agreed to lease back two of the four buildings, is in the process of moving to the site.
The purchase, FivePoint leaders said, will jump-start commercial development in the area surrounding the Orange County Great Park.
Ten-X sells for $1 billion: Ten-X, an online real estate marketplace founded in Orange County 10 years ago, said in August it’s selling a majority interest to a Boston investment firm, reportedly for $1 billion or more.
The parent of Irvine-based Auction.com sold the controlling share to private equity firm Thomas H. Lee Partners. Existing management will remain in control, and Ten-X also will maintain its hubs in Irvine and San Mateo.
Lennar buying CalAtlantic: Two years after Irvine-based homebuilder Standard Pacific merged with Ryland homes to form the nation’s fourth-biggest housing construction firm, the company got gobbled up by Miami-based Lennar. The $5.7 billion merger, which is awaiting approval of stockholders and the U.S. Securities and Exchange Commission, will make the new conglomerate the nation’s number one homebuilder.
South Coast Plaza buys Sears store: The owners of South Coast Plaza announced in July it bought the Sears store and surrounding properties from the retailer’s financially troubled holding company. Both the Segerstrom family, the mall’s owners, and the retailer said Sears will stay at the mall, now as a tenant.
“We expect that this transaction will have no impact on our current day-to-day operations or on the overall shopping experience,” said a statement from Sears Holdings Corp.
Register moves to Anaheim: In April, the Orange County Register moved its newsroom and business staff out of its iconic orange-tile office building along the 5 freeway into a newly remodeled office at 2190 S. Towne Centre Place, just south of Angel Stadium. Some of the newsroom operations were moved to Southern California News Group facilities in Monrovia and to the company’s former Anaheim bureau on Lewis Street.
The move is part of a national trend that’s seen newspapers sell off real estate and move into rented space to save money as more readers and advertisers switch to the internet for news and information.
Apartment, office buildings big sellers: Houses and condos weren’t the only properties with soaring prices and strong demand in 2017. Commercial property was in demand as well, particularly apartment and office buildings.
Rising rents and an increasing number of renters were behind a big upswing in apartment building deals. The number of transactions jumped to 4,200 sales in 2016, up from 1,264 six years earlier, figures from Kidder Mathews show. Investors paid an average of $209,165 per apartment unit this past year, up almost 47 percent from an average of $142,762 per unit in 2010.
During the first nine months of the year, 34 office buildings changed hands for more than $1.9 billion, according to JLL.
That’s a jump of 88 percent, and it’s the third straight year above $1 billion.
Zombie timeshares: The Orange County Treasurer Tax-Collector decided to sell off nearly 400 timeshares in the county’s first-ever online tax auction, seeking to recover more than $1.1 million in unpaid back taxes.
But minimum bids ranging from $800 to $11,300 were too high in the vast majority of cases. After the first round of bidding in January, 286 of 377 timeshares remained unsold, and the sale raised just $328,800.
County Treasurer Shari Freidenrich slashed the minimum bids, dropping them as low as $100, then offered them for sale again in a new online auction in April. Just 18 more sold, raising $23,500, or $835,000 shy of the amount needed to pay back taxes and costs.
Still, Freidenrich considered the online sale a success. “We were able to collect the taxes” on some of the timeshares and transfer them to new, taxpaying owners. The rest could go on sale again in a new tax auction in 2018, she said.
Gen. Lyon retires: Sixty-three years after founding a home building firm in Orange County to build houses for soldiers returning from the Korean War, William Lyon stepped down from the board of directors of his eponymous company, William Lyon Homes. By the time he officially retired last February, William Lyon Homes was the 20th biggest U.S. homebuilder, with $1.4 billion in gross revenue. Lyon is 94.
Source: Oc Register
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