Jan. 3 (Bloomberg) -- Lehman Brothers Holdings Inc. is seeking to sell 196 acres (79 hectares) of California coastal land that has approvals for residential development and was the subject of a legal fight.
Bids for the Orange County land known as Marblehead Coastal, which has 308 entitled home lots, are due by Jan. 15, according to Terry Ruckle, a principal at Irvine, California-based Land Advisors Organization, which is brokering the sale for Lehman. He declined to say how much the New York-based company expects to get for Marblehead.
An increase in California property values is driving up interest in development land in the southern part of the state, where lots are scarce. Homes in California sold for a median of $360,000 in November, up 24 percent from a year earlier and the 21st consecutive month of annual price gains, according to DataQuick, a San Diego-based real estate data provider.
“With land prices steadily improving over the past few years, and available development opportunities in Orange County being of short supply, Marblehead is experiencing considerable activity,” Ruckle said in a telephone interview. “Marblehead is one of the last large-production homebuilding opportunities along the coast with these kinds of ocean views.”
Lehman and a former partner spent $280 million to $300 million purchasing and improving the Marblehead property, including building streets and installing sewage and drainage systems, according to a person familiar with the land who asked not to be identified because the information isn’t public.
Ruckle declined to discuss how much was spent on Marblehead. Kimberly Macleod, a Lehman spokeswoman, didn’t immediately return a telephone call seeking comment on the land.
Land Advisors has had inquiries about the Marblehead property from domestic homebuilders as well as developers from Asia and the Middle East, according to Ruckle. There haven’t been any firm offers yet, he said.
Lehman won the property, in San Clemente, 62 miles (100 kilometers) south of downtown Los Angeles, after a court battle with SunCal Cos. in 2011. SunCal, an Irvine-based developer, and Lehman, the New York-based investment bank, were allies for a decade in turning land into homes for sale.
Lehman put up the money, and SunCal bought sites and prepared them for the development of homes. After Lehman’s collapse in 2008, 18 SunCal projects ended up in bankruptcy court in California, including the San Clemente lots.
The increase in California land values has sparked deals including Toll Brothers Inc.’s agreement in November to purchase Shapell Industries Inc.’s homebuilding business for about $1.6 billion. Also that month, Barry Sternlicht’s Irvine-based Tri Pointe Homes Inc. agreed to buy Weyerhaeuser Co.’s residential real estate unit in a deal valued at about $2.7 billion.
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