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Friday, Apr 19, 2024

Development Puts Otay Ranch on the Map

A clubhouse and pool are among the many amenities in Otay Ranch housing communities. Photo courtesy of Baldwin & Sons

With some of its neighborhoods nearly butting up against the border with Mexico, Otay Ranch was once thought to be too remote by some homebuyers, too long a commute for people working downtown, and even thought by some to be part of Mexico.

Those days are gone.

Based on 2018 home sales, Otay Ranch was ranked 10th in the nation by John Burns Real Estate Consulting among the top 50 master planned communities.

“Multiple new communities opened in 2018 in the Otay Ranch masterplan offering a range of affordable product in a supply-starved market,” the company wrote in its ranking of Otay Ranch.

660 sales in 2018

“The new supply drove a whopping increase to 660 sales in 2018, up from 563 sales in 2017, representing some of the highest growth rates among the top 25 communities,” according to John Burns Real Estate Consulting.

The other top 10 master planned communities ranked in descending order were The Villages in Sumter, Fla, Lakewood Ranch in Sarasota, Fla., Summerlin in Las Vegas, West Villages in Sarasota, Irvine Ranch in Orange County, Nocatee in Jacksonville, Fla, Eastmark in Phoenix, Ontario Ranch in Riverside/San Bernardino and Inspirada in Las Vegas.

That top ranking for Otay Ranch is no surprise to Steven Baldwin, president and CEO of Heritage Building & Development — one of the primary developers of Otay Ranch and part of a collaborative partnership that makes up Baldwin & Sons.

“We’ve been in a big push,” Baldwin said. “Right now, we have nine properties open, one of which is about to be going away, so it’s down to eight.” By going away, Baldwin said he means that one particular segment of homes in Otay Ranch is nearly sold out with only model homes still on the market.

Master Developer

Baldwin & Sons is the master developer of Otay Ranch. The partnership that makes up Baldwin & Sons, according to the company’s website, consists of CEO Al Baldwin and his sons Ron, Steve, and Shawn and son-in-law Randall Bone and their respective homebuilding companies — Pacific Coast Communities, Heritage Building & Development and Sunrise Co. Otay Ranch is huge, covering what was once farmland that produced lima beans, hay and grain and was later used for cattle ranching.

Generally, when people talk about Otay Ranch they refer to the portion of Otay Ranch that’s under development or where homes have already been built.

Eventually 39,476 Residential Units

By itself, that section of Otay Ranch covers 9,449 acres that will ultimately have a population projected to be 98,880 and 34,508 housing units in a mix of single-family homes, townhomes, condominiums and apartments.

There are two other sections that are still undeveloped land in the planning stages.

When finished, the entire Otay Ranch will have a population of 113,765 in 39,476 residential units over 22,899 acres of land, 13,722 acres of which will be open space, said Maria Miller, project manager for Baldwin & Sons.

Development Began in 1999

Development of Otay Ranch started in 1999 along Telegraph Canyon Road, and worked its way south.

The overall master plan for Otay Ranch divided the area into 14 villages, and each of which has its own plan.

The villages are being developed by three companies — Baldwin & Sons, HomeFed Corp. and Meridian Development.

The developers in turn have sold portions of each village to homebuilders, who do the actual home construction and construction of retail projects within Otay Ranch.

They are Heritage Building & Development, Pacific Coast Communities, Sunrise Co., Cornerstone Communities, Lennar Homes, Shea Homes, Brookfield Residential and KB Home.

Recession Lingered

Otay Ranch was hit hard by the recession and accompanying housing crisis.

“People were getting foreclosed while we were trying to sell,” said Melissa Hazlett, vice president of sales and marketing for Baldwin & Sons.

Steve Baldwin said the housing crisis hit Otay Ranch early and lingered.

“We started to see the slowdown where we started having to give away incentives in 2005. When it started, they didn’t really call it the recession, but we saw sales just drop,” Baldwin said. “We saw prices go down maybe 40 to 50%. In about 2011, we were almost the only ones in the market.”

Sales stared to pick up in 2013, Hazlett said.

Since the recession, builders in Otay Ranch adjusted what they offered to meet changes in what buyers sought and to provide housing they could afford.

Multigenerational Living

“We’re doing a lot of product for multigenerational living,” Baldwin said.

For instance Baldwin said some single-family homes are being built with three-car garages with tandem parking in part of the garage to have space that can be converted into an office or granny flat.

Affordability was cited as “a big draw” for Otay Ranch by John Burns Real Estate Consulting.

“We kind of have something for everybody,” said Nick Lee, senior vice president of Baldwin & Sons.

“For sale products range from1,000 square-foot condominiums to 4,000 square-foot stand-alone single-family homes. Prices range from about $350,000 to nearly $900,000. Apartments rent for between $1,500 to $3,500,” Lee said. “It’s a value proposition. People can actually buy here and have a yard for their family.”

David Wick, chairman of the East Otay Mesa Property Owners Association, said “Otay Ranch is phenomenal because it’s providing desperately needed housing.”

“It brings more folks, workers to our area,” Wick said, and that in turn helps draw new businesses to South County by providing a workforce for companies looking to relocate or expand.

Raine Hunter, who worked with Baldwin & Sons on Otay Mesa until forming her own consulting firm — RH Consulting Group — said Otay Ranch “changed the face of South County.”

“It hasn’t absorbed as quickly as everybody anticipated, but I think it’s developed at a pretty good pace,” Hunter said. “It was anticipated to have a 30-year build-out. That was the idea based on the number of (housing) units and assuming some ups and downs in the market. I think the Great Recession hit harder than most people could have anticipated. The market’s so different now.”

Even with sales on the upswing, Lee said it will likely be an additional 20 years for Otay Ranch to reach build-out.

Real estate reporter Ray Huard may be reached at rhuard@sdbj.com or 858-277-8904.


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