Irvine Co. Planning to Resume Building Apartments

IRVINE — Banking on a strong surge in demand for apartments in Irvine, Tustin, East Orange and Newport Beach, the Irvine Co. is renewing its apartment-building efforts after virtually ignoring the market for more than two years.

In an interoffice memo circulated Tuesday, William McFarland, executive vice president of the giant development company’s land and residential development group, announced the formation of a new division: Irvine Pacific Apartment Co.

He said that Patrick Smith, formerly chief of apartment operations for the company, will head the unit. Smith, senior vice president for residential properties, came to the Irvine Co. in 1987 as head of the apartment construction unit. As the recession diminished the company’s involvement in rental housing, however, he took on other responsibilities.

Just two years ago, Irvine Co. officials turned six of the company’s newest apartment complexes into condominiums to raise cash as the recession cut into company sales of land to other builders. Though it has not started a new apartment complex in several years, the Irvine Co. remains one of the largest apartment owners in Orange County, with more than 11,000 units in its portfolio.

The latest move comes at a time when some in the apartment industry are still complaining of falling occupancy rates because of the recession. But Irvine Co. officials, as well as other large apartment developers like Orange’s Western National Group, say that now is the time to start new units to take advantage of the economic recovery when it occurs. Also, the Irvine Co. already owns the land and can build and rent at more “affordable” prices than a developer who must first purchase property.

In his memo, McFarland said Smith will devote “full attention to apartment operations and new (apartment) construction.”