Real Estate Developers in Southern California

[Ike Ekeh]

I am fairly new to the real estate development/home builder market. A client of mine inherited a relatively large amount of land in the Southern California area (San Diego, Orange Count and Riverside County), ranging from 12 to 398 acres and wants to either put this inventory to use or offload it. I would love to speak with experienced real estate developers and home builders to get some guidance on where to start.

Thanks!

[Scott Choppin]

@Ike Ekeh

Thanks for your post here on BP. You have received some valuable answers here, and I'll add ours for your consideration. 

We are a pure real estate developer and development advisory company, in business for over 17 years, having developed over 1,600 units of housing and mixed use projects in the western US valued at over $900M of development value. 

Most importantly for your consideration, we have produced numerous entitled land deals, where we have acquired, entitled, and sold to both homebuilding and apartment development companies. Our work included all planning, political, and community interaction and management of the political process, hiring and management of the design team, hiring and management of the brokerage companies to sell the sites, and negotiation and successful sale of the projects. Over $200MM of our developed project value has been in land entitlements alone. 

An example, our last major land deal was the entitlement and sale of land for a 453 unit apartment project on 16 acres to Lennar's Multi-Family Communities Investment arm last year. This project was located in Westminster, CO. 

For you and your client, the main initial process is:

1. Identify the zoning characteristics, political environment, and real estate market demand parameters for each parcel.

With the wide variety of sites you delineate, there is a wide range of different development characteristics to research, design, entitle, and sell or build for each project. They will all have different political constraints as they are logically located in numerous different cities and political jurisdictions. 

Our company has worked in over 30 cities and all counties in Southern California, including LA, Orange, San Bernardino, Riverside, San Diego, Ventura, Santa Barbara, and San Luis Obispo counties.

2. Determine the right mix of real estate product type/types to develop on a particular site. Obtain empirical market data from the various brokerage companies that specialize in each particular product type in your design. Our company, because of our numerous land projects and sale of development projects, has relationships will all the major brokerage companies and brings those relationships to bear on each of our own development projects.

Our company has developed pure residential projects including multi-family rental, for-sale, and affordable housing. We have combined these residential types in mixed use projects including retail, office, and hotel uses. 

3. Hire and manage a design team, including architect, landscape architect, civil engineer, soils engineer, to produce the initial design concepts and schematic plans necessary to complete the entitlement process. We have relationships with most of the major design houses including: KTGY, Withee Malcomb, Architects Orange, Tom Cox, and William Hezmahalch. We have done projects with all of these architectural firms.

4. If major CEQA processing is required, such as a full Environmental Impact Report, hire and manage an environmental consulting company for the production of the EIR and all necessary CEQA documents required for the completion of the environmental review. This would include traffic engineering, biological consultant, archaeological consultant, and any and all consulting related to Army Corps of Engineers, and Federal and CA State Fish and Wildlife. This scenario is more likely on the larger parcels of land your client owns.

4. Determine market value based on direct proforma analysis, empirical research, broker conversations, and comparable analysis. 

5. Decide if a direct sale, land joint venture, partial sale of phases or product type (i.e sell commercial and build apartments) or a development scenario makes the most financial sense. Utilize direct proforma analysis to determine the most beneficial Internal Rate of Return between each scenario, and including owner risk tolerance, make final business plan decision.

6. If development is the selection, utilize proforma analysis and the schematic plans produced by the design team during the entitlement phase to introduce the project to institutional debt and equity sources for determination of underwriting criteria and to obtain initial terms sheets and commitment letters for financing. 

There is a ton more we can outline regarding details in Items 1-6, as well as, further actions beyond #6. 

You are welcome to review our website, located in the signature below. 

As well, you can review the numerous real estate development articles we have written here on BP, as well as, LinkedIn. The BP articles are located here: 

https://www.biggerpockets.com/blogs/9960-real-estate-development

Finally, we just wrote and posted an article about Land Development Underwriting today, located here:

https://www.biggerpockets.com/blogs/9960/68001-land-development-project-underwriting

If there is interest for further discussion, please feel free to send me a direct message here on BP if we can be an offer of help for you and your client's process of review and research. I am also reachable on LinkedIn, listed under Scott Choppin, Urban Pacific.

Thanks.

~ Scott Choppin