Monday, October 3, 2022

138 New Homes Coming to Mission Viejo, Irvine From Less than $600,000 to Over $1 Million

To understand the length of time some homebuilders take to acquire land, consider the challenges for Trumark Homes as it develops 138 residences at two separate Orange County sites.

In Mission Viejo, Trumark is building 91 townhomes and condos on an undeveloped hillside.

At the same time 6 miles to the west in Irvine, the master-planned community of San Ramon-based developer Great Park Neighborhoods is building 47 single-family homes on ready-to-go lots in Solis Park.

For Trumark, both projects are a stretch from his reputation as a specialist in what industry insiders call “in-fill” projects – transforming small-town spaces into housing.

Such modest, urban housing projects – building new homes on vacant lots, old shopping centres, old factories and closed schools – require some specific development skills. Also, getting construction approvals from local governments requires a lot of patience.

Building a home on raw real estate that has been manned by others in Irvine is a relative breeze for Trumark. But the high-level grading involved in the Mission Viejo construction pad has been unparalleled.

“This is the most technically challenging project of my career,” says Richard Douglas, president of Trumark’s Southern California operations, which has helped build more than 11,000 homes over his more than three decades in and around the home construction business. . “We took what we know from our Urban products and applied them here.”

at goal

The pre-construction efforts at the two sites could not have been more different.

Trumark closed in December 2020 on the Mission Viejo land purchase – paying Saddleback Church $6.5 million for additional property next to one of its administrative buildings. The money came in handy for the church, which was hurt by the pandemic shutdown and wanted to help needy members of its community.

What Trumark found was a 12.6-acre hill with a remarkable 150-foot drop from its peak to El Toro Road.

138 New Homes Coming to Mission Viejo, Irvine From Less than $600,000 to Over $1 Million
Before and after grading drone photos of Trumark Homes at the Mission Viejo site where 91 townhomes will be built. (courtesy: Trumark Holmes)

The mess at the Mission Viejo site went unnoticed for nine months because Trumark ended a grading strategy. It took seven more months to build the 6-acre pad, about 35 to 60 feet above the street where the house would go.

Then, after the construction surfaces were finally molded to specifications this spring, digging resumed. This summer, utilities and a road will be added to the home site. After the preparatory work is completed, the houses can be built. Sales won’t start until early next year.

Now, let’s compare this with the Irwin project.

The land, purchased in June 2021, was graded to such an extent that construction of houses could start early. Lots and roads were already shaped along the main utility lines at the edge of the site. Pre-sale activity began in May and the model homes should be ready by September.

What took so long?

Not only was the Mission Viejo property on a steep slope, but it is also squeezed between a major thoroughfare, a church office building and parking lot, SoCal Edison power lines, and a condo community above it.

To create flat land for construction, the back of the site had to be pulled out and turned towards a dirt road to lift the front of the property. This meant that 357,000 cubic yards of earth had to be placed in cramped quarters—or that fills up to 2,000 of a triple-axle dump truck.

A 48,000-square-foot brown-brick retaining wall had to be built to keep the mess in place.

Two of these structures overlooking the street – between 15 and 36 feet high – are under the pad. A 20-foot wall at the rear keeps the hill in place. And construction required 78,000 sand – a further 400 truckloads of sand – brought to the site to meet wall-building specifications.

“It was as difficult as we thought,” Douglas says. “But it turned out to be a lot more difficult than we thought.”

Bottom-line

The preparation work for the Mission Viejo site cost Trumark at least $15 million – more than double the purchase price. This adds to a cost of about $22 million for the buildable land — or about $250,000 for each of the 91 dwellings planned.

Those townhomes that will be called “saddleback places” will vary in size from 860 to 1,950 square feet with one to three bedrooms. Estimated pricing ranges from the high $500,000s to the high $700,000s.

In Irvine, Trumark could not disclose the cost of his land. But it’s a safe bet that the lot cost per home is likely to be twice that of Mission Viejo.

In Great Park, Trumark will build large, detached homes to defray some of those high land costs. The residences at its L’Aube in the Solis Park neighborhood will be three-story and range in size from 1,640 to 2,419 square feet with three or four bedrooms. Prices will start in the low-$1 million range.

So why would Trumark pay so much for the Irvine land?

Trumark Homes will sell Irvine homes in its L'Aube in the Solis Park neighborhood that are three storeys high and range in size from 1,640 to 2,419 square feet with three or four bedrooms.  Prices will start in the low-$1 million range.  (courtesy: Trumark Holmes)
Trumark Homes will sell Irvine homes in its L’Aube in the Solis Park neighborhood that are three storeys high and range in size from 1,640 to 2,419 square feet with three or four bedrooms. Prices will start in the low-$1 million range. (courtesy: Trumark Holmes)

For starters, it’s difficult to find land to house homes in Orange County. So having multiple sources of lots is an important business factor.

Plus, as Douglas points out, it’s all about “portfolio management”—a mix of risk-taking in a complex and dicey industry. Consider the obstacles a specific project may face.

First, there’s eligibility: can you get the land after various bureaucratic construction hurdles?

Public input limits what can be made, changing the finances of the plan. That process can also wreak havoc over time. Don’t forget, time is a lot of money when you have invested cash in land that is not being actively developed.

This could have been a bigger issue in Mission Viejo in 2020. But the city, mid-pandemic, was a “great partner,” Douglas says.

In Irvine, Great Park’s master developer, Five Points Holdings, took on the eligibility risk.

Also, think about development risk – putting the pieces together to start with approved building plans.

Creating a plan to organize financial support for a project is not easy – especially for an unusual endeavor like Mission Viejo, where the development cost far exceeds the cost of the land.

Nation World News Desk
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