By Eric Engelbert
When a Parking Garage Becomes 184 Apartments
Newport Beach's skyline transformation is not only about new towers rising on vacant or commercial land. In some cases, the shift is quieter: a parking structure that has sat mostly unused since the pandemic comes down, and housing goes up in its place. That is exactly what is happening at 800 San Clemente Drive, where the Irvine Company demolished an 842-space parking garage in December 2025 and broke ground on 184 luxury apartments in May 2026.
This is the third in a series of individual project profiles covering Newport Beach's residential development pipeline. The Irvine Company's Phase 2 expansion at Villas Fashion Island does not carry the headline drama of a 22-story branded tower, but it is already under construction, moves the fastest of any current Newport Center residential project, and is part of a 1,500-unit master plan that will fundamentally change how people live in and around Fashion Island over the next decade.
For Newport Beach, it is also a case study in how a city can fast-track housing without triggering the usual layers of public opposition, provided the developer owns essentially everything.
Who Owns Newport Center? The Short Answer Is Donald Bren
Newport Center was master-planned in the 1960s by William Pereira, the architect hired by the Irvine Company to create a self-contained commercial village on the Irvine Ranch. The Irvine Company has owned the land under Fashion Island, the surrounding office towers, and most of the supporting commercial real estate in Newport Center since the beginning. That has never changed.
Donald Bren purchased a controlling interest in the Irvine Company in 1983 and has since acquired 100 percent ownership. He runs the company privately. Bren is consistently ranked among the wealthiest real estate investors in the United States, with a net worth estimated in the range of $17 billion. The Irvine Company holds approximately 126 million square feet of real estate across 560 communities, 40 office campuses, and a large retail portfolio. Newport Center sits at the center of that empire geographically and symbolically.
Because the Irvine Company already owns the land at 800 San Clemente Drive outright as part of its Newport Center holdings, there is no acquisition cost to report for this project. The parking garage that previously occupied the 2.2-acre site was a Irvine Company asset. There was no land sale, no transfer price, and no third-party buyer. The company simply chose to redevelop its own property from a lower and lower use into housing.
That distinction matters for how this project compares to others in the Newport Beach pipeline. Most of the other developments profiled in this series involved a land sale, a new owner, or a creative entitlement process. The Irvine Company's Phase 2 project is a master-planned owner converting underperforming parking into high-demand housing on land it has held for more than half a century.
The Project: Phase 2 at Villas Fashion Island
The existing Villas Fashion Island complex at 1000 San Joaquin Plaza opened in 2017 as one of Orange County's premier luxury apartment communities. The 524-unit community sits on approximately 16 acres and features Italian-inspired Palladian architecture with resort-style amenities including pools, a clubhouse, yoga studio, and resident lounges. It has operated at or near full occupancy since opening.
Phase 2 expands that community onto the adjacent 2.2-acre site at 800 San Clemente Drive, where the Irvine Company demolished a four-story, 842-space parking garage. The new building will be five stories and contain 184 apartments across approximately 225,000 square feet of residential space, for an average unit size of roughly 1,220 square feet. Two subterranean parking levels will provide 287 dedicated spaces.
Residents of Phase 2 will have full access to the existing Phase 1 amenities: pools, the clubhouse, yoga studio, and resident lounges. Phase 2 will also add its own dedicated amenities including a pool, sauna, fitness center, coworking areas, and outdoor courtyards.
Combined, the two phases will total 708 units at Villas Fashion Island, making it one of the largest luxury apartment communities in Newport Beach and among the largest in Orange County.
Address: 800 San Clemente Drive, Newport Beach
Building: 5 stories, approximately 225,000 sq ft
Units: 184 luxury apartments
Avg unit size: approximately 1,220 sq ft
Parking: 2-level subterranean, 287 spaces
Demolition began: December 2025
Construction start: May 2026
Expected completion: early 2028
Combined Phase 1 + Phase 2 total: 708 units
No Public Hearing Required: How PC-56 Works
One of the most notable aspects of this project is how it was approved. Unlike the Related California towers, which required a Planning Commission hearing and are now subject to City Council appeals, the Irvine Company's Phase 2 project moved forward through an entirely administrative process. No Planning Commission hearing. No City Council vote. City staff reviewed and signed off.
That is possible because of the North Newport Center Planned Community zoning, formally known as PC-56. The Irvine Company worked with the city to establish PC-56 as a zoning framework that pre-approves development standards for residential and commercial uses in Newport Center. Projects that meet those pre-established standards can be approved administratively by planning staff without a public hearing, as long as they fall within the parameters already set.
Oscar Orozco, an associate planner with the City of Newport Beach, described the project's purpose to the Orange County Business Journal: "This project takes a site that wasn't serving a specific use and turns it into housing that helps meet the city's needs."
The PC-56 framework was updated in March 2025 when the Newport Beach Planning Commission voted 5-0 to approve amendments that vested the Irvine Company's right to build up to 1,500 dwelling units within Newport Center. The amendments also adjusted building height limits at Fashion Island, Block 100, and San Joaquin Plaza, modified parking standards for residential uses, and updated signage and open space requirements. The Irvine Company requested all of those amendments as part of setting up a long-term residential development program across Newport Center.
The 800 San Clemente Drive project is the first major residential project to move through the PC-56 administrative track under the updated framework.
Part of a 1,500-Unit Newport Center Master Plan
The 184 units at 800 San Clemente Drive represent only the first phase of a much larger residential buildout by the Irvine Company within Newport Center. Under the PC-56 development agreement, the company holds vested rights to construct up to 1,500 residential units across various sites within the planned community zoning district.
Other Irvine Company residential projects in various stages of planning and approval in Newport Center include Block 100 at 100 to 190 Newport Center Drive, which has been proposed at approximately 600 to 700 apartments and would involve converting an existing low-rise office campus into a new podium-style residential building. Additional sites within Newport Center are being evaluated under the same 1,500-unit vested rights framework.
Taken together, the Irvine Company's Newport Center residential program represents a deliberate, long-term strategy to transform what has historically been a daytime office and retail district into a live-work residential enclave. Newport Beach planners have actively encouraged that shift. The city's state-mandated housing target of 4,845 units for the 2021 to 2029 planning cycle creates pressure to add residential density in areas with existing infrastructure, and Newport Center fits that description better than almost anywhere else in the city.
The Irvine Company's approach is distinct from other developers in the pipeline because the company owns the land and controls the pace of development. It does not need to acquire sites, negotiate with landowners, or structure complex financing arrangements. It executes on a timeline of its own choosing, which is why the 800 San Clemente project moved from demolition permit to construction start in roughly five months.
What Will Phase 2 Rents Be?
The Irvine Company has not released pricing for the new building. Phase 2 is expected to open in early 2028, and a leasing program will likely be announced six to nine months before completion.
The existing Phase 1 community opened in 2017 with starting rents of approximately $3,450 per month for a one-bedroom unit and up to $8,600 per month for a two-bedroom loft. By 2026, asking rents at Villas Fashion Island start at approximately $5,195 per month, reflecting nearly a decade of appreciation in the Newport Beach luxury rental market.
Phase 2 rents are expected to price at or above current Phase 1 rates, depending on unit mix and finish level. Applying current Newport Center market conditions to the disclosed average unit size of approximately 1,220 square feet produces the following estimates for 2028:
- One-bedroom units: approximately $4,800 to $6,000 per month
- Two-bedroom units: approximately $7,000 to $9,500 per month
- Estimated annual revenue at full occupancy (184 units): roughly $14 million to $18 million per year
These are market-based estimates. The Irvine Company has not disclosed the unit mix (number of one-bedroom vs. two-bedroom vs. larger units) for Phase 2.
There are no income-restricted units in Phase 2. The Irvine Company's development agreement with the city requires 105 total affordable units across Newport Center by 2029, but those are expected to be located in other Newport Center projects within the 1,500-unit portfolio.
What This Means for Newport Beach's Tax Base
The Irvine Company has owned the Newport Center land for decades. Under California's Proposition 13, that means the land is assessed at a historically low base value, far below its current market value, because it has never been sold to a new owner at current prices. The parking structure itself had minimal assessed value as a commercial improvement.
Converting 225,000 square feet of new residential construction onto that site does trigger a reassessment of the improvement value, meaning the new building is assessed at its construction cost. For a five-story, 184-unit luxury apartment building in Newport Beach, construction cost alone is likely in the range of $80 million to $110 million. Adding that to the existing low land assessment would produce a new combined assessed value in that range.
Annual property tax implications at 1.1% of an estimated $100 million combined assessed value:
- Total annual property tax: approximately $1.1 million
- Newport Beach's share at roughly 17 cents per dollar: approximately $187,000 per year
That figure is relatively modest compared to the for-sale condo projects in this series, because the Irvine Company retains the apartments as a long-term investment rather than selling individual units. When units sell, Prop 13 resets each unit's assessed value to the sale price. When units rent, no such reset occurs. The building is assessed once at construction cost and then appreciates only 2% per year under Prop 13 rules.
The larger fiscal contribution to Newport Beach from this project is indirect: more residents in Newport Center means more spending at Fashion Island, more sales tax revenue, and greater justification for continued investment in the surrounding commercial district. The Irvine Company benefits from that flywheel too, since it owns Fashion Island and most of the surrounding retail.
Frequently Asked Questions
What is being built at 800 San Clemente Drive?
The Irvine Company is replacing a former four-story, 842-space parking garage with a five-story, 184-unit luxury apartment building. Construction began in May 2026 and is expected to wrap up by early 2028. The new building will join the existing 524-unit Villas Fashion Island community at 1000 San Joaquin Plaza, bringing the combined total to 708 units.
How did this get approved without a public hearing?
The project was approved administratively by city planning staff under the North Newport Center Planned Community zoning (PC-56). This framework allows the Irvine Company to build housing that meets pre-established design and density standards without going through the Planning Commission or City Council. The 1,500-unit vested right under that framework was confirmed in a 5-0 Planning Commission vote in March 2025.
What will rents be in the new building?
No pricing has been released. The existing Villas Fashion Island community starts at approximately $5,195 per month as of 2026. Phase 2 pricing is expected to be comparable or slightly higher when leasing opens, likely sometime in late 2027 ahead of a 2028 completion.
Are there any affordable units?
Phase 2 at 800 San Clemente Drive is entirely market-rate. The Irvine Company's overall Newport Center development agreement includes an obligation to provide 105 affordable units by 2029, but those units are expected to come through other projects in the company's 1,500-unit Newport Center portfolio.
How does this fit into the Irvine Company's larger Newport Center plan?
The 184 units at 800 San Clemente represent the first completed phase of the Irvine Company's 1,500-unit residential buildout across Newport Center. Additional projects, including a proposed 600-plus unit conversion of the Block 100 office campus at 100 to 190 Newport Center Drive, are moving through planning under the same PC-56 framework.
Renting vs. Buying in Newport Beach
The addition of 708 luxury rental units at Villas Fashion Island, combined with high-rise for-sale condominiums from Related California and Ritz-Carlton Residences, is creating a range of options in Newport Center that did not exist before. Whether you are deciding between renting in Newport Center or purchasing a home in the surrounding community, I can help you understand the market and what makes sense for your situation.
