Major Home Builder Formed by Merger : Construction: New San Juan Group of Cos. will be 55% owned by Santa Margarita Co., 45% by Western National Group.
Signaling a continued shift toward home building, the Santa Margarita Co. said Wednesday that it will own 55% of a home construction concern created in the merger of two local firms.
Called the San Juan Group of Cos., the new company combines Western National Homes, the apartment and home building arm of Western National Group, the largest apartment developer and manager in Orange County, and the San Juan Group, a home builder owned by the Santa Margarita Co., developer and manager of 40,000 South County acres, of which it owns 12,000.
Earlier this year, the Santa Margarita Co. purchased the San Juan Group from investors. Santa Margarita President Anthony R. Moiso had already held a controlling stake in the San Juan Group, which was sold for an undisclosed amount.
The new company will become one of Orange County’s largest builders if it makes good on plans to build 300 to 500 homes and about 1,000 apartments each year.
“This is a logical combination of our two businesses and complementary skills,” said Matthew K. Osgood, 34, president of Western National Homes, who will be president and chief operating officer of the new company, which will be located in Rancho Santa Margarita.
Western National Group would own 45% of the combined building company, with Santa Margarita Co., the developer of such master-planned communities as Rancho Santa Margarita and Las Flores, owning the controlling stake. No layoffs are planned at the company, which will have 50 employees. Financial details were not released.
The new entity would build apartments for Western National, which plans to go public with a $167-million real estate investment trust offering this year. The privately held company has more than $1 billion in assets and 27,000 mostly California apartment units under management, nearly 80% of them in Orange County. Western National had earlier said its home building arm would not be included in the REIT.
Last year, Western National Homes built about 200 single-family homes and 230 apartments, while San Juan built about 150 homes, all in Rancho Santa Margarita.
“It sounds as if they are developing an in-house building entity for the Santa Margarita Co.--with full-range capability of both single-family homes and apartments,” said John Shumway, president of Market Profiles of Costa Mesa, a real estate consulting firm.
“It’s a good fit because it’s a merger of expertise. San Juan was primarily a home builder and Western National has been apartments,” he said.
Shumway said that if the merged company builds up to 500 homes and 1,000 apartments each year, as it plans, it would be one of the larger builders in the county.
“We want to be known as a home builder that also builds apartments,” said Dennis Bean III, 41, president of the San Juan Group, who will be chief executive officer of the new company. “We are bringing together some talented people and we want to get busy and build some of these projects.”
He said San Juan has plans to buy 112 housing lots in Rancho Santa Margarita and several other sites in south Orange County, including in the 1,000-acre Las Flores master-planned community.
San Juan Group of Cos. at a Glance
* Founded: July, 1994
* Headquarters: Rancho Santa Margarita
* Chief executive officer: Dennis Bean III
* Employees: 43
* Merger details: Formed by combining Western National Homes, founded in 1989, and San Juan Group, founded in 1990.
* Projects: Plans to build as many as 500 homes and 1,000 apartments a year, making it one of Orange County’s largest builders.
Source: San Juan Group of Cos.; Researched by JANICE L. JONES / Los Angeles Times
