Work Commences on 300-Unit Apartment Community in Orange County
- Sep 13, 2012
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.