Housing Segment of Lagunitas Mixed-Use Project in California Sells for $10M, Readies for Development

Townhomes at Lagunitas

By Barbra Murray, Contributing Writer

Carpinteria, Calif.–Investec Real Estate Cos. has found an investor to buy and develop the residential portion of Lagunitas, its 25-acre mixed-use project in Carpinteria, Calif. ResCal Lagunitas 73 L.L.C. acquired the 12-acre residential site for $10 million and tapped MD2 Communities to spearhead development of the single- and multifamily homes.

With a location 10 miles east of Santa Barbara and 80 miles west of Los Angeles right off the 101 Freeway, Lagunitas will sit just a short jog from the Pacific Ocean at 6380 Via Real. Investec Real Estate originally acquired the property in 2007 with plans to build a 360,000 square-foot office destination. But when officials of the City of Carpinteria–recognizing the desirability of the live-where-you-work development concept–expressed a desire for a mixed-use project, Investec Real Estate stepped up to the plate with a new design.

A new plan was in place but the path forward was not obstacle free. The City gave the final green light for Lagunitas in September 2008, but a roadblock in the form of a citizens’ group’s appeal to the California Coastal Commission reared its head. However, the pause in the project did not last long; the Commission rejected the appeal in November of the same year.

Now it’s smooth sailing for Lagunitas. The 13-acre office portion of the project will offer just over 84,500 square feet of premier space. Investec Real Estate is already in talks with companies interested in getting their name on the office building’s tenant roster.

MD2, a joint venture partnership involving D2 Development Inc. and the Mattey Group, will work with Investec Real Estate on infrastructure construction for the entire Lagunitas project before commencing construction of the residences as early as fall 2011. The residential offerings will consist of 36 townhomes, 11 of which will be designated as affordable units, and 37 single-family homes.

Sunny Santa Barbara County’s condominium/townhome market took its punches during the economic downturn, but the worst may very well be over at this point. Sales activity was relatively steady from July 2009 to July 2010, according to a report by real estate sales and investment services firm The Zia Group. And in the Carpinteria submarket, good news on the market’s health came in the form of an increase in the median sales price from $449,000 to $484,000.

A bevy of investors came out in the hopes of acquiring and developing the residential segment of Lagunitas, serving as a strong indicator that those in the know see something promising in the greater Santa Barbara condominium and single-family sector. “We received substantial interest in the residential portion of our Lagunitas project, which resulted in multiple offers at our asking price,” Ken Slaught, president of Investec Real Estate, noted in a prepared statement, adding that the closing terms of the transaction with