Continuing Divestiture, Irvine Co. Puts Newport Boat Slips, Parcel on the Block
The Irvine Co., continuing a trend of selling some moderate-performing assets to generate additional revenue, said Thursday that it wants to sell 560 boat and yacht slips in Newport Harbor, as well as a 4.3-acre site proposed for a new marina development.
The slips, along with nearby small parcels of land leased for marina parking lots or clubhouses, are the latest assets to be put on the block by the developer. The company has sold a cable television system, three golf courses and about 700 apartment units in the past two years. The 160-acre Tustin Ranch Golf Club was sold to Sanyo Foods Corp. of America just last month.
“This is consistent with our policy of selling land leases that generate modest returns,” Irvine Co. spokeswoman Dawn McCormick said. “We are interested in getting to understand the market for these things. We may be selling; we may not.”
The company is asking about $30 million for the entire package, according to an interested party who has seen a marketing package. McCormick would not confirm the figure.
With the recession cutting into its primary business of developing and selling land, the Irvine Co. has begun divesting itself of some assets that have had moderate returns, given the depression in land prices since the peak five years ago.
Also on the block is a parcel at Dover Drive and Coast Highway, near the former site of the Castaways Restaurant. California Recreation Co., a subsidiary of the Irvine Co., has approval to build up to 71 slips for boats 40 feet and longer, the size most in demand. The Irvine Co. is asking $3 million for the site, according to the marketing package.
“Their business is to make money by selling land, but business is down so much, they need to sell (some assets) to stay afloat,” said Jim Kelley, chairman of Optima Asset Management Services Inc. in Newport Beach, which manages office buildings and apartment complexes. “These assets are not as depressed as other real estate assets.”
Marina operators throughout Southern California used to have long waiting lists for slips, and owners of large boats 35 feet and longer still find that they have to wait to get sites for their watercraft. Yet vacancies have risen for smaller boat slips as recession-weary boat owners either sell them off or store them to save money on slip fees.
“Until the economy gets a lot better, it’s not going to change,” said Tim Quinn, marine facilities manager at Newport Dunes. “It’s seasonal and due to the economy.”
Newport Harbor has fared better than other areas, he said. Newport Dunes, the largest single marina in Newport Harbor with 430 slips, leases about 90% of its sites and expects to be full as summer approaches, Quinn said. Its monthly fees, ranging from $11.50 to $14.75 per foot, have not fallen.
Although some of the Irvine Co. slips are vacant, it is not a significant number, McCormick said.
Even so, Kelley, who formerly was in charge of an Irvine Co. subsidiary that oversaw its recreational assets, said the price being asked for the slips and additional properties is “a little aggressive.”
“There are probably not as many buyers for marinas and golf courses,” he said. “But on the West Coast, (Newport Harbor) is probably the area you would want to look at first.”
