Hot in O.C.: Condos, Mixed-Use, Office and Health Care

As available land shrinks and becomes more expensive, developers are taking to the skies with impressive high-rise residential and mixed-use projects. More than 6,500 condominiums are under construction or on the drawing board in the county. Office construction recently heated up following years of inactivity. And in the health care segment, major projects are under construction in Newport Beach, Orange and Fullerton.

By Greg Aragon

Orange County is best known for its beautiful beaches, Disneyland, an international airport named after actor John Wayne and a popular television show called the "O.C."

Marquee at Park Place is a $150 million, two-tower condominium project. The 18-story structures are the tallest buildings to be erected in Irvine's 30-year history (photo by Paul Napolitano).

Add incredible development to the list.

Construction is on the march in sectors such as condominiums, mixed-use, office, health care and highway improvement in the county of 3 million people and 34 cities.

"I'd say we're into a boom," said Dennis Serraglio, director of sales and marketing for Vancouver, Canada-based Bosa Development. "The residential condominium market is very strong in Orange County."

More than 6,500 condominiums are under construction or on the drawing board in the county, and Serraglio tied baby boomers and low-interest rates to the surge.

"[People] are getting older and sizing down from single-family homes," he added. "Most of our buyers are 50-plus, looking for low maintenance, low interest rates and an ease of lifestyle."

Serraglio said 95 percent of Bosa's development is in high-rise condominiums, and about one third of the company's work in California in 2004 had its roots in Orange County.

Highlighting Bosa's local development are two large projects in Irvine. One is an as-yet unnamed, $300 million condominium project, which is currently going through re-zoning issues.

The other project is the luxurious Marquee at Park Place, a $150 million, two-tower project. The two towers, at 18 stories each, are the tallest buildings to be erected in the city's 30-year history.

"Not only will residents be surrounded by luxury, they will be close to all this dynamic area offers," said Natale Bosa, founder and CEO of Bosa Development.

Located at the corner of Jamboree Road and the 405 Freeway, the project is currently 80 percent complete, 100 percent sold out and about eight months from occupancy.

When finished, the Marquee compound will feature 228 luxury condominium suites and four two-bedroom townhomes in the two towers. Prices will range from $525,000 for a two bedroom suite up to $1.45 million for a townhome.

The East Tower will contain 118 units and the West Tower will offer 114. The two- and three-bedroom floor plans feature full-height windows, balconies and high-end wood, limestone, marble and granite finishes.

The project was designed by Vancouver-based Dikeakes Architects and is being built by Bosa's construction division.

Mixed-Use

Meanwhile, just a few miles north in Santa Ana, the idea of combining office and residential is taking hold.

"Mixed-use is the hottest topic right now," said architect Rick Aiken, principal in charge of urban mixed use for Santa Ana-based William Hezmalhalch Architects, Inc. "It is trendy and fashionable-and Orange County is now getting into it."

One mixed-use example is the Santiago Street Lofts, a 108-unit project that will combine for-sale lofts with separate work spaces.

Developed by the Aliso Viejo office of Lennar South Coast and the Santa Ana office of Urban West Strategies, the three-story project broke ground in July. It was designed by William Hezmalhalch Architects and is located on a 4.3-acre site across from the Santa Ana Train Depot, which serves Amtrak and Metrolink trains.

Aiken, who was the principal designer for the project, said the lofts are zoned for B-occupancy, which allows residents to operate a commercial business from their home.

"This [project] will help clean up the entry to Santa Ana," he added. "It is very much an urban village. The buildings look like little office buildings and embellish a European attitude."

The lofts, being built by Miami-based Lennar Homes, will range in size from 1,500 to 2,200 sq. ft., with prices starting in the $400,000s. Phase one of the two-phase project is expected to be completed this spring.

All this development does not mean that prices are going down for housing in Orange County.

According to San Diego-based MarketPointe Realty Advisors, the average current median price of a detached home in Orange County is $1.16 million and $587,000 for an attached residence.

MarketPointe CEO Russell Valone predicted a "soft" residential market in the county for the remainder of the year.

"We're not going to get to the [home sale] volumes we saw a year or two ago simply because people can't afford the market right now," added Valone, whose company tracks home sales throughout the county. "Orange County is moving more and more toward the market of the elite."

MarketPointe reported 1,052 homes sold in the first quarter of this year, a 37 percent decrease from the 1,658 sold in first quarter 2004.

Office

Construction of the expanded corporate headquarters of First American Financial Corp. in Santa Ana is expected to be finished in August. The $65 million project, designed by Irvine-based LPA Inc. and being built by San Diego-based Lusardi Construction, broke ground in March 2004 (photo by Paul Napolitano).

And then there is the office building market, a sector that Jeff Jenco, vice president of San Marcos-based Lusardi Construction Co., called very "popular."

Lusardi has three projects in Orange County, totaling approximately $74 million and 360,000 sq. ft. Jenco said that low interest rates are pushing the upswing in this market.

"[These rates] are allowing buyers to own for less than their lease payments have been," he added.

Lusardi's largest project in the region is on MacArthur Boulevard in Santa Ana,-a 211,000-sq.-ft. corporate headquarters for First American Financial Corp. The $65 million project was designed by Irvine-based LPA Inc.

The project broke ground in March 2004 and will include two 2-story office buildings and one 3-story building when it is finished in August.

In Mission Viejo on the county's south side, office construction has also caught the attention of Chuck Wilson, the city's director of community development.

"Office is doing really well right now," Wilson said. Building activity is currently about $25.5 million or roughly 14-percent ahead of last year's pace, he added.

Spearheading the charge is the $20 million CentrePointe complex, which opens this month. Developed by Newport Beach -based CT Realty Corp., the 7-acre project is located at Alicia Parkway and Jeronimo Road in the heart of Mission Viejo.

The Mediterranean-styled office park was designed by Irvine-based Ware Malcomb and built by Newport Beach-based HBI Construction. It consists of eight office buildings, ranging from 4,600 to 12,700 sq. ft. for a total of 58,000 sq. ft.

Health Care

The health-care sector is also running a construction fever, due in large part to strict new building requirements that followed the 1994 Northridge earthquake. These requirements compel new and existing hospitals to meet state seismic codes.

"Many [hospital] owners have determined it is cheaper to replace than upgrade," said Scott L. Whitlock, director of project development for the Irvine-office of Hensel Phelps Construction Co. "Either way, the building industry is provided an opportunity."

Hensel Phelps, which has seven current projects totaling about $465 million under way in Orange County, is presently doing prep work and demolition on the new $246 million replacement hospital for the University of California Irvine Medical Center in Orange.

Designed by Seattle-based NBBJ, the project broke ground in February and will meet the California's SB 1953 seismic requirements by 2008. In addition to the existing 102 beds in the medical center's tower and the 84-bed Neuropsychiatric Center, the expanded facility will also include 191 patient rooms and 13 state-of-the-art surgical suites.

Other major health care projects under construction in the county include expansions at Hoag Hospital in Newport Beach, St. Joseph Hospital in Orange and St. Jude Medical Center in Fullerton.