Shea Properties began developing master-planned communities in the 1980s, but the history of its parent company started a century earlier. Orange County, Calif.-based J.F. Shea Co. Inc. launched as a plumbing supplier in 1881 and later branched into large public works projects, including work on the Hoover and Parker dams in the 1930s. Today, Shea Properties owns and operates more than 7,500 apartment units and 5 million sq. ft. of commercial space valued at approximately $2 billion.
In January, Shea Properties welcomed new president and CEO Colm Macken, a 25-year real estate veteran who spent the last 11 years developing live-work-play communities in California and Colorado for Forest City Enterprises. NREI spoke with Macken about Shea Properties' current direction.
NREI: The company has made a number of high-level hires recently. What skill sets are you bringing in and why?
Macken: We've really been looking for experience across product types, because the deals driving our developments right now involve mixed-use. We have a large amount of development in the pipeline, so we've been filling senior positions to take care of the projects already in the works and to grow our operations in California, Colorado and Arizona. Our goal is to grow the company to $5 billion in assets by 2010.
NREI: One of those projects in the Shea pipeline is Vistancia, a 7,100-acre project near Phoenix that the National Association of Home Builders named America's Best Master Planned Community in 2005. What other projects is the company working on?
Macken: The biggest would be Riverpark in Oxnard, Calif. That's about 900,000 sq. ft. of retail and office space integrated with a master-planned community of about 700 acres of single-family homes.
In Orange County, we are the master developer of Tustin Legacy, a huge infill project that is a joint venture between Shea Properties, Shea Homes and Centex Homes. That will include more than 2,000 homes and 6.7 million sq. ft. of commercial space, mostly office and apartments with a smaller retail component.
On the former Fort Ord Military Reservation in Marina, Calif., the same joint venture is developing a combination power center and lifestyle center in a master-planned community. That has more than 760,000 sq. ft. of retail, 750,000 sq. ft. of office and research space, and more than 1,200 housing units, predominantly single-family but with some multifamily mixed in.
NREI: What trends are you tracking in mixed-use development, and where do you see the most opportunity?
Macken: While mixed-use development was new five or 10 years ago, it's here to stay today, especially in California and the Western states. Traffic congestion and increased commute times are pushing us all toward mixed-use. Consequently, I don't believe local municipalities are going to approve projects in the future unless those projects include a mixed-use component. And clearly, the best mix of uses today is retail mixed with office and multifamily housing.