Once part of the Annenberg estate, a square mile of virgin sand in Rancho Mirage just sold for $75M
Amy DiPierro, The Desert Sun Published 9:48 a.m. PT March 28, 2018
(Photo: Jay Calderon/The Desert Sun)
One of the most-coveted squares of virgin sand in the Coachella Valley has sold to a group of investors led by a Canadian private equity firm for $75 million.
The undeveloped property, once part of the Annenberg Estate, spans most of a square mile property known as Section 31 in Rancho Mirage.
Because of its proximity to Sunnylands and location within ritzy Rancho Mirage, Section 31 has long been eyed as a prime location for home and resort development. But ownership of the land fractured into a 60-40 split after Walter Annenberg sold it in the late 1970s – and for the past few years, the bankruptcy of one of the land’s former owners has put a damper on any development plans.
Now, Section 31 is out of bankruptcy and, with the exception of a 22-acre chunk spun off as a separate parcel and sold in December 2017, back in the care of a single owner.
What’s next for the larger site is still coming into focus.
The 618-acre property was purchased by EC Rancho Mirage Holdings Limited Partnership on March 26, according to a sale deed. That entity is led by a Vancouver-based firm, Clarity Real Estate, a representative of the buyer confirmed to The Desert Sun.
In an email statement, Clarity Real Estate said the property has the potential to become a “community and destination,” adding that it would share more specific details as its “planning and envisioning” process continues.
Section 31, also called The Eagle, is a great white square of land set off from the lush golf courses that border it on three sides. It starts at the northeast corner of Bob Hope and Frank Sinatra drives and stretches uninterrupted for a mile north to Gerald Ford Drive and east to Monterey Avenue.
In the Coachella Valley, the property’s combination of size and centrality is rare. To find a bigger untouched site, a developer would likely venture toward the edges of the valley, perhaps north of Interstate 10 or east to Mecca and Thermal.
“It’s a prime in-fill piece in that part of the northern Coachella Valley,” said David Landes, who represents parties like real estate developers at the land brokerage Land Advisors Organization. “It’s got a Rancho Mirage address, it’s freeway close, it’s close enough to downtown Palm Springs and it’s big enough to do a special project on it.”
Local developer Peter Solomon put things more bluntly in a 2005 interview with The Desert Sun.
“This is the last great piece of ground in the central valley,” said Solomon, who owned the 40 percent share of Section 31 at the time.
Now that piece of ground is in the hands of EC Rancho Mirage, the investment group led by Clarity Real Estate.
According to its website, Clarity and related entities have acquired over $2 billion in undeveloped land, commercial projects and residential units since 2011, primarily in the western and southern United States.
EC Rancho Mirage bought the property from sellers Stark RM Eagle, LLC and Difference RM Properties, LLC, according to a sale deed. The listing broker on the sale was Jeff Woolson of CBRE. The sale totaled $75 million, according to Russell Holmes, a representative of the buyer.
Clarity Real Estate was founded by some of the principals of Second City Real Estate, a fellow Vancouver private equity firm, Holmes said.
Indeed, four unlabeled photographs on the Clarity Real Estate website correspond to four office buildings in Denver, Colorado, St. Petersburg, Florida and Dallas, Texas that Second City Real Estate also lists as investments on its website.
And Second City has a connection to another huge development in the Coachella Valley, Holmes said: it is part of a joint venture with Pulte Group to build a 55+ retirement community in Rancho Mirage.
Holmes said the acquisition of Section 31 is being financed primarily with equity from a pair of New York-based family offices. Additional financing for the deal includes a fixed-rate loan, according to a news release by real estate firm HFF.
This is not the first time more than a hundred acres of land has traded in the Coachella Valley in the past 12 months.
In August 2017, financial giant BlackRock bought the 167-acre University Park property in Palm Desert.
And in January, the family trust of a man thought to be among the largest property owners in the country purchased 1,100 acres in north Indio previously pegged for 3,000 homes.
Amy DiPierro covers real estate and business news at The Desert Sun in Palm Springs. Reach her at email@example.com.