Archstone Acquires Development Site in Orange County
- Jul 28, 2011
Huntington Beach, Calif.–Apartment specialist Archstone has acquired a four-acre development site in Huntington Beach, Calif., as part of a joint venture with Red Oak Investments, and is planning to develop a mixed-use property there called Archstone Huntington Beach Center. The infill development will include about 384 apartments and 10,000 square feet of ground-floor retail space.
The site was purchased for an undisclosed amount from Amstar, which acquired the existing 60,000 square-foot office and retail center on the site in 2007 in partnership with Red Oak, an Irvine, Calif.-based developer. Amstar and Red Oak then secured the required zoning and entitlements to begin construction on the new property.
According to Archstone, the deal represents an opportunity to revive its development efforts in one of its core coastal markets. Archstone Huntington Beach Center will be the company’s tenth apartment property in the Orange County market. All together, Archstone owns or has an ownership stake in more than 420 properties in the United States and Europe totaling more than 76,800 units.
“Thanks to Archstone’s financial restructuring in December, we have a strong balance sheet and were able to purchase the land for Archstone Huntington Beach Center with our own capital,” Chaz Mueller, Archstone COO, tells MHN. “As is often the case with apartment development transactions, we will seek construction financing when we’re closer to the start of construction next year.”
The restructuring was undertaken last year by Archstone’s owners, Lehman Brothers Holdings Inc., the remains of the defunct investment bank, as well as Bank of America Corp. and Barclays Capital Real Estate Inc. As a result of the restructuring, Archstone’s debts were reduced by about $5.4 billion, presumably to make the company a better candidate for a sale or an IPO.