The guessing game about the net worth of Donald Bren or any other real estate mogul is more than mere gossip fodder.
The ups and downs of these estimates are one metric tracking perceptions of real estate markets.
The latest edition of the Forbes 400 annual tally of America’s richest people pegs the fortune of Bren, owner of Newport Beach-based real estate giant Irvine Co., at $15.2 billion.
That valuation was the same a year ago, though Bren moved up three notches on Forbes’ 2016 rankings to claim the 27th-largest American personal fortune. Bren still owns the nation’s largest private real estate empire, easily outdistancing No. 2, New York developer Stephen Ross, at $7.4 billion.
Bren, who always declines to talk about his wealth, has been a long-running growth story in a real estate industry that hasn’t been kind to many fortunes. He has been on the Forbes 400 every year since its inception in 1982 when he was valued at $350 million. And Forbes’ estimate of the Bren fortune has grown nearly fivefold since 1999 – more than double the pace of a major real estate valuation index.
So one year of flatness in Bren’s estimated wealth isn’t a big reason for concern for local or statewide real estate. If you recall, Forbes cut Bren’s wealth estimate by 40 percent in 1989-91 amid that era’s downturn. And since, the Irvine Co. has grown out of its Orange County roots by adding projects in San Diego, Los Angeles and Silicon Valley, as well as trophy office towers in Chicago and New York.
Forbes offered up a mixed bag of 2016 valuation calls on real estate empires across the region:
• Newport Beach’s George Argyros was valued at $2.1 billion, up $100 million from 2015.
• The Olen real estate companies, based in Newport Beach, made Floridian Igor Olenicoff worth $3.7 billion, up $100 million.
• Rick Caruso of Brentwood was at $3.7 billion this year, up $200 million.
• David Murdock of Ventura was valued at $2.6 billion, down $300 million.
• And Donald Sterling of Beverly Hills came in at $3.4 billion, up $300 million.
• FYI: Presidential candidate and New York real estate developer Donald Trump was valued at $3.7 billion, down $800 million in a year.
Debating billions aside, it’s fair to say some real estate niches seem to be at a crossroads.
The office market seems a bit sluggish these days. The pace of renting up empty space has slowed a touch this year as new construction is finally boosting supply. For example, Bren has three new towers in Orange County, plus a fourth under construction. All told, Irvine Co. owns 500 office properties.
Homebuilders remain busy. Bren was early to homebuilding after the last downturn, making a major (and correct) bet on new homes in Orange County, starting in 2010. It has paid off handsomely, as his villages in north Irvine are the nation’s fastest-selling master-planned community this year. But any builder’s challenge going forward isn’t the appetite of buyers – it’s that there is serious competition for those house hunters.
Apartments continue to do well across the region and nationwide. And Bren controls roughly 60,000 units. Demand is high and vacancies are rare, translating to rising rents. As long as the economy stays strong, the net worth of Bren or any major apartment landlord won’t suffer.
Then there are retail malls, a tough sector in an age where it’s too easy to stay at home and shop online.
The industry secret is to have must-go, constantly updated, cutting-edge shopping hubs that mix retailing, dining and entertainment. Bren’s 40-plus retail centers often fit that bill, with Irvine Spectrum undergoing a major upgrade.
So was Bren flat for 2016? My guess is not. But even if it was an off year, a brief pause in valuation in an industry known for violent price swings isn’t always the worst thing.
Contact the writer: jlansner@scng.com
