Great Park Updates
Storage is about to get very expensive, but it doesn't have to.
With the pending loss of 2300 RV storage spaces, (displaced by the Great Park Development) you owe it to yourself to read the article below. Control your costs. Purchase your own private garage.
February 1st, 2012
Recent articles on the development of El Toro / Great Park
Great Park Plan Unveiled - OC Register
Updated January 27th, 2012
The Long-Awaited Development Will Begin Construction Next Week - OC Metro
Five Points Breaks Ground - OC Metro
Great Park Will Move Forward Board Says - OC Register
UPDATE: Work to start on Great Park homes - OC Register
Money woes won't derail Great Park homes - OC Register
5000 Homes Approved - OC Register
Irvine Approves Development - OC Metro
Land Deal Done - Voice of Orange County
Adult Leadership - Fox and Hound Daily
Irvine Council Approves Homes Project Near Great Park
-Daily Pilot
5,000 homes approved around Irvine's Great Park
- L.A. Times
Great Park Moves Forward - OC Register
Businessweek - Lennar Dares to Build Again
Haddad Defies OddsOrange - County Business
Great Park Moves Forward -OC Metro
Moving on the Great Park - LA Times
For Developer, California Dream Is a Reality . - Wall Street Journal
State Street Refinances 5,000-Home California Project
, 1.4 BILLION! - Bloomberg
Builder: Great Park homes to be selling by late '12 - OC Register
Beautiful day for the neighborhood
- Daily Pilot
Well, the writing is on the wall. I have been predicting this out come for over five years now. It is all coming together, just three years later than anyone anticipated.
Now more than ever, consider purchasing your own storage garage. Control your costs. The cost for RV storage is bound to increase very shortly. Don't be left out in the
cold with high storage costs.
Bought your first home?
Many have wondered if buying your storage, RV or otherwise, makes economic sense, especially in these
tough economic times. If you look at buying your storage just for the short term, you are probably better off renting. The same
holds true for any type of real estate. It is a long term game, not a short term "flip" as many have called immediately buying then selling
real estate.
Like buying your first home, it was probably easier, quicker and cheaper to rent your home rather than buying. However, you decided to purchase your home and
now you no doubt have realized some significant gains. I'll bet today you are happy you bought rather than taking the easy route by enriching your
landlord. There is no reason storage can play out that same scenario.
The Lennar Syndrome (The 800 Pound Gorilla)
Many potential buyers and renters alike may not be aware of the 800lb gorilla looming in the RV storage industry.
About five years ago, Lennar Corp purchased the El Toro Marine Base in Orange County. Their plans
were to build up to 35,000 homes on the 3700 acres they purchased. Many don't realize that included with that sale was the RV Storage facility
(the largest in the nation) that houses 2300 RV's.
the current "buzz" in real estate circles is they are starting to ramp up their efforts to start building as the housing situation is starting to
make a recovery. All Star Services the lease holder of the storage at El Toro was only giving a month to month lease this year, rather than a full one or two year lease. What does that tell you?
So what does this mean to OC RV Owner?
Honestly, quite a bit. Once the RV's at El Toro are given their walking papers, it will be no less than a crisis in the making.
RV'ers have had the luxury of being able to store their RVs at El Toro for what is bargain basement prices. A 40' space is renting for
$165 a month. Granted it is outside on gravel, but hey, it's cheap. Remember my second paragraph talking about buying vs renting your home? The glory days of
cheap storage rentals is about to change dramatically.
First off, RV storage in Orange County is already in short supply, with long waiting lists at most any storage facility. Secondly, SCE, the owners of all that
juicy land under the power lines, has stopped any future development (including RV storage), under the lines with the only exception be agriculture, sighting fire danger and
access to provide maintenance on the power lines. See this LA Times article. So, the only valid option for future RV storage is gone.
Now, take an already saturated market place, and introduce 2300 new desperate clients seeking a somewhat rare commodity, RV storage, what do you get?
Yep, higher prices. Since I am deeply involved in this industry, I know of many storage facilities that are wringing their hands at the thought of the
ensuing onslaught of new storage customers. Guess what these new customers are going to be facing? Yep, a doubling of storage costs. It simple economics
of supply and demand. Too much demand equals increased costs due to limited supply.
Is there relief in sight?
In a single word, no. I have been working on this RV storage problem for six years. I cannot see any relief for the Orange County area. Land values are
simply too high to make economic sense to store RV's. They do not generate enough income to justify the incredible land costs. Generally, raw land costs
in Orange County are at a low of 1.5 million per acre, up to, well who knows. The average is probably about $40.00 per sq ft or nearly 2 million
per acre, assuming you could even find a lot more than 2 acres, large enough for the economical development of RV storage. If you think the costs end there,
you are sorely mistaken. Orange County has very high development standards, which only adds to the extreme cost of building. I know, I am a developer and
tried to work with 15 Orange County cities, and came up with nothing but insane costs and impossible building requirements. Before I threw up my hands
and moved my idea to Beaumont, here is what I found out.
Why cities hate RV storage
Most Cities don't want RV storage since it does not generate any income to the city, i.e., sales tax revenue, even though those same cities
pass ordinances prohibiting RV storage. Further, RV storage is considered a visual blight, and we employ very few people out of the labor pool. Additionally, the property tax revenue on land with no buildings is low. Another strike against RV storage. Maybe if we sold a few Slurpees with each rental the city might let us build.
Enormous building costs will make affordable RV storage a thing of the past in OC.
Land costs for an area you would even feel comfortable driving to in Orange County are 1.9 million an acre +
Development costs (even just paving) is about another $40. per sq foot bringing the cost to an incredible 3.6+ million per acre.
In order to get a 10% return on your investment you would have to charge $493 a month to store a 40' RV outside, not even under cover. OUCH!)
Based on 3.6 million cap cost, @ 6% interest only is $216,000 per year or $18,000 per month, or $450 per month per RV based on 40 RV's per acre.
That does not even include any potential profit, carry costs during construction, or utilities, insurance, taxes or any buildings what-so-ever.
The figures do not lie. That is the problem in a nut shell. RV storage in Orange County will be a thing of the past soon, or at the very least,
so expensive, it will only be for the very wealthy individual.
The Answer is staring you in the face (Video Link)
As I see it there will be two choices for the future or current RV owner. Any new developments to help relieve this impending crisis are at least two years away, as
projects of this type take an enormous amount of time to complete.
Further, a developer tried to entitle a 16 acre site at a SCE substation on Ward Ave Near Garfield in Huntington Beach. It was shot down by the city in a much publicized hearing June 21st of this year. Video here My heart goes out to the developer. Been there, done that.
Additionally, I don't know if you have heard anything lately, but banks have not and will not fund new construction projects. They are in worse shape than the rest of us. So, any new facilities in the next 2 years, frankly are a dream. More like 3-5 years.
Your options are limited
1. Drive to other areas inland from Orange County to find available inexpensive storage (there will be 2300 others on your tail).
2. Buy your storage in a project like mine and control your costs. Yes I know, this seems self serving, but maybe now you can understand why I built this project. The
writing is on the wall. Future costs for storing an RV are going to increase. Even in these tough times, have you seen any reduction in the cost for RV storage? I'll
bet your answer is no. When things get better, what do you think will happen to the current storage rates? Yep. Through the roof, especially when
El Toro Closes.
Great Park Moving Forward - 10,700 Homes Scheduled
This 3,700-acre parcel of land in Irvine used to be home to the El Toro Marine Corps Air Station. Today, the land is witnessing a remarkable transformation. A 1,347-acre metropolitan park twice the size of Central Park in New York City will be at the heart of a new community unlike any other in Orange County. The Great Park Neighborhoods will follow the master-planned tradition of the city of Irvine and the practices that have guided its development and made it one of California’s most desirable cities to live in. When completed, three distinct neighborhoods will hug close to the Great Park, and the new development will be home to 5,000 families with five million square feet of space set aside for commercial and other uses, including several education institutions. Plus, concrete and other materials that were used to build the base and the runways will be recycled and repurposed during construction.Ground breaking of 5,000 homes and 1.2 million sq ft of commercial property is set for January 31st, 2012. Followed by a 2nd phase of 5,700 homes.
Great Park Neighborhoods' Web Site