Work Commences on 300-Unit Apartment Community in Orange County
By Barbra Murray, Contributing Editor
In California, Orange County’s apartment market will soon grow by 300 units, now that Lyon Communities has kicked off construction on The Marke @ South Coast Metro, a luxury property in Santa Ana. Lyon is developing the project in partnership with Integral Communities.
The Marke will occupy nearly 4.5 acres and, within a cluster of four- and five-story buildings designed by COE Architecture International, offer a host of amenities designed to appeal to renters seeking higher-end accommodations. There will also be 2,300 square feet of retail space and a 660-space parking facility.
It’s a project that will sprout up in the right place at the right time. The Marke will help feed a market that is hungry, and growing hungrier, for apartments. It is employment that’s spurring demand in Orange County.
“Broad-based job gains across most sectors have ignited household formation, improving vacancy rates in both high-end and lower-tier apartments, and across nearly every submarket,” as noted in a report by Marcus & Millichap Real Estate Investment Services. “Demand for top-tier apartments remains strong as more high-paying jobs are created in the county.”
In the second quarter, the vacancy rate for Class A properties in Orange County dropped to 4 percent, marking an 11-quarter decline. The Santa Ana submarket fared even better with a vacancy rate of just 2.2 percent.
The lending community is evidently keen on The Marke. Commercial real estate services firm HFF arranged financing totaling $22.8 million for the development.
“The mezzanine and construction debt financing arranged by HFF provided a full capital stack solution for this development financing request at a very competitive yield structure, especially as compared to JV equity,” said Mark Erland, director with HFF.
Bank of America Merrill Lynch, California Bank & Trust, Comerica and Pearlmark Mezzanine Realty Partners III L.L.C have all committed financing for the apartment community.
Tilden-Coil Constructors is the general contractor for The Marke, which is on schedule to make its debut in 2013.