J.M. Peters Buys Estate-Size Lots for $26 Million : Housing: Newport builder says it plans to make 125-acre acquisition in Tarzana the ‘jewel’ of its Southland operation.

J.M. Peters Co., the Newport Beach home builder, has paid $26 million in cash for 175 estate-size housing lots in a Tarzana community in the Santa Monica Mountains, company officials said.

Called Mulholland Park, the 125-acre gated community with a view of the San Fernando Valley was sold to J.M. Peters by Bank of America, which took over the property from a development partnership in a foreclosure.

Mulholland Park was designed for luxurious custom residences, with lots ranging from 10,000 square feet to 17,000 square feet. J.M. Peters will reduce the lots to between 3,500 square feet and 5,500 square feet and build homes priced from $500,000 to $1 million each.

“As our initial project in post-recession Los Angeles County, we are sparing no effort to make Mulholland Park the jewel in the crown of our entire Southland building program,” said Dale Dowers, chief operating officer. Work will begin at the end of this year, Dowers said.

In mid-May, J.M. Peters sold $100 million of junk bonds to pay down debt and buy land. The company, like most Southern California home builders, has been hard hit by the real estate downturn. Since posting a string of losses in the early 1990s, however, the company reported a $3.9-million profit for its latest fiscal quarter.