Also in Irvine, Opus West Corp. recently completed development of 3000 The Plaza, two 15-story high-rise condo towers. The residences feature gracious entry foyers, floor-to-ceiling windows, and a balcony or terrace. Kitchens are equipped with premium appliances, polished granite, and Euro-style cabinetry; master baths boast natural stone and slab granite.
In 2008, CIM Group completed Center Street Promenade in downtown Anaheim. The mixed-use project features 276 loft-style apartments, 129 condos, retail space, and office space. This urban environment is within walking distance to local restaurants, the futuristic Disney Ice Arena, and a Farmers’ Market.
Also in Anaheim, BRE is currently developing Park Viridian, a 320-unit apartment community. Located in the Platinum Triangle area of Anaheim, the community is just minutes from The Honda Center, home to the Anaheim Ducks; Angel Stadium of Anaheim, home to the Los Angeles Angels; Disneyland and Disney’s California Adventure; and the Downtown Disney District, which features ESPN Zone, House of Blues, specialty shops, and restaurants.
A BRIGHTER DAY AHEAD With Orange County a major hub for the sub-prime home mortgage crisis, it is ripe with cases of foreclosures and related fallout from tightening credit markets. As a result, many homeowners have returned to the rental arena. This is keeping multifamily landlords happy with a stable, average projected year-end vacancy of 4.5 percent, according to Reis. Vacancy is expected to climb slightly during 2009, to about 5.7 percent, and eventually level off by year’s end. By 2012, landlords can expect the Orange County multifamily vacancy rate to be at roughly 5.3 percent versus 5.8 percent in the West and a national average of 6.7 percent.
Like the rest of the country, unfortunately, rent growth continues to slide. The good news is that very few owners are offering concessions. According to Reis, Orange County was expected to finish at 3.1 percent annualized rent growth in 2008. This compares to 3 percent across the country and 3.5 percent in the West. However, it may get worse before it gets better. As the country flights its way out of financial crisis, many expect to see Orange County bottom out at 2 percent rent growth by the end of 2009 before starting to recover and climb to approximately 4.5 percent in 2012, according to Reis. By 2012, Orange County will separate itself from the West and the rest of the nation when it comes to rent growth, with an expected improvement to approximately 3.5 percent, as compared to 3.1 percent growth in the West and 2.9 percent nationwide.
As Orange County continues to plot its recovery, there is one thing that is almost certain: The long-term investor who times his market entry right in 2009 will reap great rewards as this market not only recovers, but does so at a rate that will outperform most other markets in the United States. Investors have seen Orange County do so in the past, and they believe it will do so again in the future.
MFE DOZEN: Orange County, Calif. (January) Riding Southland waves
Austin, Texas (February) Sunbelt safe haven
South Florida (March) Opportunities on the shore
Detroit (April) Motor City madness