Posted July 2026 | By Eric Engelbert | Updated as the project moves through construction and sales.
A Vacant Office Building Is Becoming 86 New Townhomes
A five-story office building that sat mostly empty for years near the 5 and 55 freeway interchange in Santa Ana is coming down to make way for 86 new townhomes. Meritage Homes, one of the largest publicly traded homebuilders in the United States, paid $19.2 million for the site at 2020 East First Street in April 2025. Demolition is underway and the project is targeting a grand opening in late 2026.
This is one of the more interesting new home projects in Santa Ana because of how it got here. The site went through a full ownership and re-entitlement story before a shovel hit the ground: a Seal Beach commercial real estate firm bought the building, tried to lease it, renovated it, and eventually pivoted to residential conversion when the office market could not absorb the space. That pivot is now becoming 86 for-sale townhomes in a part of Santa Ana that has not seen this type of new ownership housing product in some time.
What Was There Before: The Office Building's Story
The building at 2020 East First Street was originally constructed in 1985, a five-story, 111,483-square-foot office building on 3.72 acres. It sits north of the interchange where the 5 and 55 freeways meet, close to the Santa Ana Zoo and the Metro East neighborhood.
In 2018, Harbor Associates, a Seal Beach-based commercial real estate company, acquired the building in a joint venture with Blue Vista Capital Management for approximately $13.3 million. Harbor's plan was to reposition and lease up the asset. They invested about $1.4 million in upgrades, including a new roof, lobby improvements, facade work, and infrastructure changes. The timing proved difficult. Office demand in the area never recovered to the level the renovations assumed, and the COVID-19 pandemic accelerated the decline in office occupancy across Orange County.
Rather than continue chasing office tenants in a market with rising vacancy, Harbor shifted the plan entirely. Working with the City of Santa Ana, Harbor pursued a re-entitlement of the property from commercial office use to residential. The city supported the conversion, which aligned with Santa Ana's housing goals under its state-mandated Housing Element. Once entitlements were in place, Harbor brought the property to market for sale.
In April 2025, Harbor sold the entitled site to Meritage Homes for $19.2 million, or roughly $5.2 million per acre. Harbor Principal Paul Miszkowicz commented at the time that the COVID pandemic fundamentally changed how people live and work, and that markets with too much office supply but not enough housing were prime candidates for adaptive reuse.
The Numbers Behind the Land Deal
The $19.2 million sale price reflects how the entitlement work Harbor completed added value beyond what a vacant office building would have fetched. When Harbor originally paid roughly $13.3 million for the property in 2018 as an office asset, it was valued on its potential as a commercial building. Seven years later, after renovation costs and re-entitlement work, the entitled residential site sold for nearly $6 million more to a national builder ready to break ground.
At $19.2 million for 3.72 acres, the land works out to $5.2 million per acre, or $172 per square foot of land area. For a new for-sale townhome project in Orange County, that is a meaningful land cost that will be reflected in eventual sale prices. Meritage is building 86 units on the site, which translates to a land cost of roughly $223,000 per door before any construction, financing, or soft costs.
| Prior Owner | Harbor Associates / Blue Vista Capital Management |
|---|---|
| Harbor's Purchase Price (2018) | Approximately $13.3 million |
| Harbor's Renovation Investment | Approximately $1.4 million |
| Sale Price to Meritage (2025) | $19.2 million |
| Price Per Acre | $5.2 million |
| Price Per Square Foot (land) | $172 |
| Land Cost Per Unit | ~$223,000 (86 units) |
Project Details: What Is Being Built
Meritage's development arm, MLC Holdings, filed plans under application number DP-2024-14 to demolish the existing office building and construct 86 new homes across 15 three-story buildings separated by private drives. The design was created by Irvine-based Kevin L. Crook Architect, Inc., with C2 Collaborative handling landscape architecture. The contemporary architectural style features gabled rooflines with exterior color schemes in white, gray, and brown, or white, powder blue, and slate, with black or brown doors.
| Address | 2020 East First Street, Santa Ana, CA 92705 |
|---|---|
| Total Units | 86 (80 townhomes + 6 live-work units) |
| Townhome Size | 1,200 to 1,800 SF (2 to 4 bedrooms) |
| Live-Work Units | 6 units at approximately 2,500 SF each |
| Parking | 2-car garage per unit (side-by-side or tandem); 194 total spaces including guest |
| Affordable Units | 5 units reserved for very low-income households |
| Site Size | 3.72 acres |
| Building Height | Three stories |
| Architect | Kevin L. Crook Architect, Inc. (Irvine) |
| Landscape | C2 Collaborative |
| Status | Demolition underway; grand opening targeted Q4 2026 |
Five of the 86 homes will be reserved for very low-income households under California's density bonus program. The income threshold is roughly $78,900 per year for a four-person household. Each home includes a two-car garage, and the HOA will enforce that garages are kept available for vehicle parking rather than used as storage, which is a common requirement in Orange County townhome communities.
About the Developer: Meritage Homes and MLC Holdings
Meritage Homes is a Scottsdale, Arizona-based publicly traded homebuilder founded in 1985 by Steve Hilton and William "Bill" Cleverly. It is the fifth-largest public homebuilder in the United States by homes closed, with more than 200,000 homes built across twelve states including California, Arizona, Colorado, Utah, Texas, Florida, and the Carolinas.
The Santa Ana project is being developed through MLC Holdings, a Meritage division focused on California infill housing. Founded in 2014, MLC Holdings has offices in Newport Beach and San Ramon and has built more than 10,000 homes in California. Their focus is on smaller urban and suburban infill sites that are close to jobs and transit, often replacing older commercial uses with new ownership housing. In addition to this project, MLC Holdings has plans to redevelop the former Trinity Broadcasting Network property at 3150 Bear Street in Costa Mesa with 126 townhomes and 20 single-family homes.
The 2020 East First Street project sits adjacent to a large senior affordable housing complex at 2222 East First Street that was completed in 2021, which means the block is already in the process of transitioning from its older office and commercial character toward a residential neighborhood.
Sale Prices: Not Yet Released
As of July 2026, Meritage has not released an official price list for the 2020 East First Street townhomes. The project is listed as preconstruction on major new home listing platforms, with pricing to follow closer to the sales launch. I keep up on new construction projects like this across Orange County and research price lists as they become available. Check back here for updates, or reach out directly and I will share what I have.
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