Chevron Agrees to Sale of Major Parcels of Land : Real estate: Tentative deal with O.C. builder and Morgan Stanley division involves 18,000 acres--including 2,200 at Coto de Caza--sources say.
In what would be one of the largest California land sales in recent history, Chevron Corp. has reached a tentative agreement to sell a portion of its vast real estate holdings to an investor group led by a division of the investment bank Morgan Stanley & Co., sources said.
Although neither party would comment on the deal or its value, sources said that Morgan Stanley Real Estate Fund II L.P. and Orange County builder Christopher Gibbs had been selected to buy more than 18,000 acres Chevron owns throughout California.
Included in the deal are such major undeveloped properties as 2,200 acres in the master-planned community of Coto de Caza in Orange County, a 480-acre site in Huntington Beach, the 85-acre Torrey Pines Science Park in La Jolla, 400 acres in La Habra and more than 14,000 acres of ranchland stretching from San Diego to Calaveras County.
“It’s certainly one of the biggest deals we’ve seen in a very long time, as long as I can remember. And Chevron has been wanting to get out of real estate for a while,” said Sanford Goodkin, a real estate consultant in La Jolla. “The good news here is that money is coming back into real estate in California.”
Although real estate specialists said it was difficult to put a value on the deal because of the varied holdings, the nearly 6,000 acres being sold in Orange County could be worth $400 million.
“Their [Morgan’s] timing is excellent,” said Ken Agid, a real estate consultant in Irvine. “At this point in time, Southern California is in the early stages of coming out of a severe real estate downturn and we’ve got a short supply of land. So this is an intelligent decision.”
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In March, Chevron said it would sell 40,000 acres it owned through its subsidiaries Chevron Land & Development Co., Huntington Beach Co. and Pacific Coast Homes and other affiliated companies.
A source Monday said Chevron decided to pull some properties out of the deal and negotiate with Morgan on the remaining 18,000 acres.
About 1,000 acres Chevron owns in Whittier, about 500 acres in Montebello and 500 acres in Fullerton were not included in the deal, although the company is negotiating with other buyers on those properties.
About 7,000 homes can be built on the Chevron land in Orange County, which includes the Holly Seacliff development in Huntington Beach.
“As we announced, we have put these properties up for sale,” Bonnie Chaikind, spokeswoman for Chevron Corp. in San Francisco, said Monday. She declined to elaborate.
Morgan Stanley real estate funds have acquired more than $4 billion in all types of property including office, industrial, retail, hotel and residential properties. Morgan Stanley Real Estate Fund II is an approximately $1-billion fund managed by a subsidiary of Morgan Stanley Group.
Officials at Morgan Stanley could not be reached for comment.
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Gibbs, formerly head of operations at J.M. Peters, a large Southern California home builder, declined to comment Monday on his participation in the deal. Gibbs, 51, now runs Christopher Homes in Newport Beach.
In 1990, Gibbs was listed as being the third-highest-paid executive of an Orange County company, making nearly $1.8 million in salary. The previous year, he reportedly made $2.9 million at J.M. Peters.
The other consortium reportedly bidding for the Chevron property included publicly traded Lennar Corp. of Miami, the nation’s seventh-largest builder, and longtime Orange County builder Jim Peters, who founded J.M. Peters.
Peters declined to comment Monday.
