Santa Margarita Co. to Develop More Buildings
Santa Margarita Co., an enormous landowner in southern Orange County, has decided to build and develop more of its own apartments, stores and factories, a major change in the way the company does business.
Until now, the company had built most of the commercial buildings in the new town of Rancho Santa Margarita in partnership with other local developers such as Koll Co. and SDC Development Co. Or it had simply sold its land to developers, who then built their own buildings on it.
The company may still do those kinds of deals, Executive Vice President Thomas Blum said earlier this month. But it also is anxious to build its own portfolio of buildings in which it will not have to share ownership with partners.
The company had planned to do its own developing eventually, Blum said. In fact, it has already developed a few buildings by itself: apartments and two industrial buildings now under construction.
Loss of Employees
But the loss of three key employees since December prompted President Anthony R. Moiso and Blum to “stand back and take a hard look at where we’re going,” Blum said.
The result was to make the move now, Blum said.
The company said the change also allows it to build a broader range of buildings, since it will no longer be dependent on finding a partner for a particular project.
The move reflects a new confidence on the part of the company that it has the expertise to develop buildings on its own, local experts said.
It also reflects the company’s desire to keep for itself what it obviously expects to be very valuable buildings near a new freeway, the Foothill Corridor, those experts said. That could be built through the town as early as 1992.
The second largest private landholder in the county, after the Irvine Co., Santa Margarita owns 40,000 acres in booming southern Orange County.
When the new town of Rancho Santa Margarita is completed in 15 years on 5,000 of those acres, it will have 50,000 residents and provide 26,000 jobs, the company says.
The company said it anticipates building about 200,000 square feet of commercial space a year. The majority will be free-standing industrial buildings.
Building Plans
Of 1,100 apartment units built or under construction now, the company has developed about half on its own and plans to build more, Blum said.
Most of the commercial buildings will go up in the town’s 400-acre business park--already home to 60 companies and 3,000 employees--and 230 acres in the town’s planned downtown, now completely undeveloped.
One of the benefits of joint ventures is spreading the risk of development. But Blum said the company is not worried that it might be caught overextended in an economic downturn, which is believed by some economists to be in the near future.
The reason, Blum said: The financial partner that Santa Margarita invited to help develop the entire town in 1985, Copley Real Estate Advisors, a subsidiary of New England Mutual Life Insurance Co. Copley provides Santa Margarita Co. with a strong financial partner.
The company does not plan to add many employees, Blum said. It may be taking a lesson from the Irvine Co., which hired hundreds of people in the past but has been laying them off as it contracts out more of its businesses.
‘Stay Small’
“We’re not hung up on having a lot of people,” Blum said. “We want to stay small.”
Santa Margarita Co. now employs 170, including employees in a mortgage unit, an escrow subsidiary and a cable television venture.
The company said it was promoting two employees to manage its new businesses. A. Martin Stradtman, the former director of commercial and industrial sales, was named vice president for the business properties group.
And Dennis Bean III, formerly director of project development, becomes vice president for the residential investment properties group.
