A southern California landmark is set to become a new mixed-use development once its new owners nail down the funds to close escrow on the ziggurat-shaped building some time in the next five months.
Owners Hilco Development Services and Pintar Investment have until April 26 to secure $160 million to close escrow and move forward with redevelopment plans for the Chet Holifield Federal Building at 24000 Avila Road in Laguna Niguel. Otherwise the 1.1 million-square-foot property goes into foreclosure and the U.S. General Services Administration kicks off another sale process.
The companies did not immediately respond to a request to comment. But Hilco principal Cameron Hildreth, who has worked for development firms in the area including Caruso and The Irvine Co., told the Orange County Business Journal: "We're searching for strategic partners."
After a five-month auction, Hilco and Pintar won the property with a bid of $177 million, paying a nonrefundable 10% down payment to the GSA.
The federal building’s redevelopment could become one of the largest projects in South Orange County, spanning multifamily, office and retail space. Hildreth estimated it could take three to five years to complete the entitlement process, demolish the building and develop the site.
The local office market is improving. Since peaking a little over a year ago, Orange County office vacancy has declined 100 basis points to 12.5% as of the fourth quarter of 2024, according to CoStar data.
There's clear demand for housing in Orange County, according to Jesse Gundersheim, a CoStar Group senior director of market analytics. "A housing shortage in coastal California fosters high occupancy across Orange County apartments," he said. The national vacancy rate of 8% is nearly double that of Orange County's. And Orange County vacancies rank second lowest among the nation's largest 50 markets.
Even so, the region's flat jobs market could drag on prospects for redevelopment. A lack of available workers has limited job growth in Orange County over the past three years as overall coastal California population has declined, Gundersheim said.