Posted July 2026 | By Eric Engelbert
The 1,050 Apartments That Were Coming to The Hive And Why They Never Got Built
In January 2025, Bay Area developer Legacy Partners published a 400-page environmental impact report for a project that would have been Costa Mesa's largest new housing development in decades. The plan was to demolish The Hive, a 190,000 SF creative office campus at 3333 Susan Street near South Coast Plaza, and replace it with 1,050 rental apartments spread across three phases on 14 acres. The Planning Commission reviewed the project and recommended it move to the City Council in June 2025.
It never got there. In October 2025, Invesco Real Estate sold the property to San Francisco-based Drawbridge Realty for $77.9 million. On the same day Drawbridge closed the purchase, they signed a 15-year lease with Anduril Industries, the Costa Mesa defense technology company founded by Palmer Luckey. Anduril took the entire 190,000 SF campus. The housing project was officially dead. This is the story of how Costa Mesa came close to adding 1,050 homes to its housing stock, and what happened instead.
The Site: The Hive Campus at 3333 Susan Street
The Hive sits on approximately 14 acres at 3333-3337 Susan Street in North Costa Mesa, a stretch of industrial and commercial land near the intersection of Susan Street and South Coast Drive, a short distance from IKEA, South Coast Plaza, and John Wayne Airport. The campus was developed in 2003 and is made up of three two-story office buildings totaling 190,000 SF, built around a community courtyard with an espresso bar, outdoor lounge, indoor and outdoor conference spaces, and a fitness center. The site also includes approximately 3 acres of undeveloped land.
The property became famous locally when the Los Angeles Chargers relocated their training operations to The Hive in 2017, using the adjacent practice field before moving their operations to El Segundo in 2023. After the Chargers left, Invesco was left with a partially occupied campus in a softening office market. Among the tenants who remained were Agility Fuel Systems, SteelWave, Lazy Dog Restaurants, and a significant presence by Anduril Industries, which had leased space at the building at 3337 Susan Street. Legacy Partners, the developer who would eventually propose Hive Live, also maintained an office there.
Invesco had paid $84 million for the property in 2018 at the peak of office market demand. By the time they sold in October 2025, they received $77.9 million — a $6.1 million loss after seven years of ownership, reflecting how much the post-pandemic office market had shifted even for well-located properties.
The Hive Live Proposal: 1,050 Apartments in Three Phases
Legacy Partners began working on the Hive Live concept after the Chargers left the site and it became clear Invesco was open to a sale or redevelopment. The pitch to the city was straightforward: the industrial-zoned land was underperforming as an office campus, Costa Mesa needed more housing to meet its state-mandated RHNA allocation of 11,760 units by 2030, and the location near major employers, transit, and retail was exactly where apartments should be built.
The project required a General Plan Amendment, Zoning Amendment from industrial to residential, a Specific Plan Amendment for the North Costa Mesa Specific Plan, a Tentative Parcel Map, Master Plan, Development Agreement, and a Density Bonus Agreement. None of that is unusual for a project of this scale. A Draft Environmental Impact Report was published on January 21, 2025, with a public review period running through March 31, 2025.
What Was Proposed
| Location | 3333-3337 Susan Street, Costa Mesa (near South Coast Plaza) |
|---|---|
| Total Units | 1,050 rental apartments |
| Affordable Units | At least 105 (10% low-income, in exchange for density bonus) |
| Retail | 3,692 SF |
| Open Space | 335,958 SF (~7.7 acres), including pools, dog park, rooftop deck, exercise stations |
| Parking | 1,756 spaces across all three phases |
| Building Heights | Up to 77 feet 6 inches (approximately 5 stories) |
| Site Area | ~14.25 acres |
| Developer | Legacy Partners (San Francisco Bay Area) |
| Existing Structures | To be demolished |
| Draft EIR Published | January 21, 2025 |
| Planning Commission | Recommended approval, June 2025 |
The project was designed to be built in three phases, each with its own amenities, leasing office, and distinct architectural character. Phase 1 (315 units at the corner of South Coast Drive and Susan Street) would have gone first, followed by Phase 2 (346 units along Susan Street between South Coast Drive and Sunflower Avenue), then Phase 3 (389 units). Each phase was designed to operate independently so the project did not have to be completed all at once to be financially viable. The target resident profile was professional renters aged 25 to 45 working at nearby employers.
In a letter to the city in August 2024, Legacy Partners Senior Managing Director Timothy O'Brien framed the project as a walkable, bike-friendly community that would support the surrounding retail and restaurant ecosystem: "Hive Live will provide an opportunity to create a true work live environment in North Costa Mesa. Hive Live's location is conducive for a walk-bike environment to local employers and will support local retail and restaurants such as The Lab/Camp, SOCO, and South Coast Plaza."
The Deal That Ended It: Drawbridge Buys, Anduril Leases, Same Day
The sequence of events in October 2025 was swift. Drawbridge Realty, a San Francisco-based office investor, closed the acquisition of The Hive campus from Invesco Real Estate on October 1, 2025, for $77.9 million. On that same day, Drawbridge signed a 15-year lease with Anduril Industries for the entirety of the 190,000 SF campus. The deal left no ambiguity about what would happen to the land: Anduril would occupy the existing buildings, the buildings would not be demolished, and the Hive Live housing project was finished.
Drawbridge CEO Charlie McEachron described the acquisition as aligned with the firm's "long-term investment strategy" and called The Hive "an outstanding property in a premier location." Drawbridge had been publicly targeting an expansion of its office portfolio, and The Hive with a creditworthy 15-year anchor tenant fit that profile cleanly.
Mayor John Stephens publicly expressed disappointment at the outcome. The housing project had been working through the city's approval process, had cleared Planning Commission, and was positioned to move to the City Council when the sale occurred. There was no vote the council could have taken to stop it — once the property sold to a buyer committed to leasing it as an office campus rather than demolishing it for housing, the entitlement process became moot. Costa Mesa lost 1,050 potential housing units in a single transaction.
A Quick Timeline
Invesco Real Estate purchases The Hive campus for $84 million.
Los Angeles Chargers move training operations to El Segundo. The Hive campus becomes partially occupied.
Legacy Partners proposes Hive Live to Costa Mesa City Council.
Draft Environmental Impact Report published. Public review period opens.
Public review period closes after 70 days of comment.
Costa Mesa Planning Commission recommends the project move forward to City Council.
Drawbridge Realty closes acquisition of The Hive for $77.9 million. Same day: 15-year Anduril lease signed. Hive Live project abandoned.
Who Is Anduril, and Why Are They Taking Over North Costa Mesa?
Anduril Industries was founded in 2017 by Palmer Luckey, who had previously founded Oculus VR and sold it to Facebook for $2 billion in 2014. Anduril builds autonomous defense systems, surveillance technology, and military software for the U.S. government and allied nations. The company has grown rapidly since its founding and has become one of the most prominent defense technology companies in the country.
Anduril's physical expansion in Costa Mesa has been striking. Their primary headquarters is a 640,000 SF facility at The Press, the former Los Angeles Times printing plant at 1375 Sunflower Avenue. That building sits immediately adjacent to The Hive on Susan Street. In the months around the Drawbridge acquisition, Anduril also signed a lease for 163,000 SF of industrial space in Santa Ana and a 42,000 SF office also adjacent to their Costa Mesa headquarters. Adding The Hive's 190,000 SF puts Anduril's combined Costa Mesa and Santa Ana footprint at approximately 1 million SF, all clustered in the North Costa Mesa industrial corridor near the 405 Freeway.
The growth reflects Anduril's government contract pipeline. Defense tech companies require large, secured facilities that are difficult to find in Southern California. Costa Mesa's industrial land near a commercial airport and major freeways has made it the company's anchor location. As long as Anduril's defense contracts continue to grow, the pressure they put on available industrial and office land in Costa Mesa is likely to continue.
What This Means for Costa Mesa's Housing Picture
The numbers are significant. Costa Mesa has a state-mandated obligation to plan for 11,760 new housing units by 2030 under its Regional Housing Needs Assessment. Approximately 57 percent of Costa Mesa residents rent rather than own, one of the highest renter shares of any city in Orange County. Hive Live would have added 1,050 rental units, including 105 affordable units for low-income renters. The project would not have solved Costa Mesa's housing shortage on its own, but it would have made a meaningful dent.
The loss illustrates a tension that shows up repeatedly in California cities trying to meet housing mandates. Industrially and commercially zoned land is often the easiest candidate for housing conversion because it is large, flat, and cleared of residential opposition. But that same land is also where high-growth employers want to expand. When a defense contractor can sign a 15-year lease on 190,000 SF, the economics of that outcome often outcompete a housing development that requires years of entitlement, an EIR, and multiple layers of public hearing before a single shovel touches the ground.
The city's housing element, which has been under state scrutiny, still needs to find sites that can realistically be developed for housing. The loss of The Hive site makes that job harder. Costa Mesa Mayor John Stephens acknowledged the disappointment publicly, noting that while Anduril is a positive economic presence in the community, the city needed those housing units.
What Is Still Being Built in Costa Mesa?
Despite the Hive Live setback, there are several new housing developments moving forward in Costa Mesa. One Metro West on the former South Coast Repertory site is bringing 957 apartments to the city. The Bear Street residential project near the 405 will deliver 142 for-sale townhomes by Meritage Homes. Intracorp Homes entitled 38 live-work condominiums at 960 West 16th Street, now being built by Taylor Morrison. Victoria Place is bringing 40 for-sale condominiums to Newport Boulevard and Victoria Street. And the Fairview Developmental Center Specific Plan covers a 100-acre state-owned site with plans for thousands of units long term. We track all of these projects and can help you find a home in Costa Mesa regardless of where things stand in the market.
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