By Eric Engelbert
Paseo Espada: A 247-Home Neighborhood Proposed to Replace the Capistrano Business Park in San Juan Capistrano
On the east side of Interstate 5, just off Ortega Highway, sits a 15.6-acre business park of Spanish-style offices and warehouses that most San Juan Capistrano residents drive past without a second thought. A developer wants to tear all of it down and build a residential neighborhood called Paseo Espada, with up to 247 homes: for-sale single-family houses, for-sale townhomes, and 56 deed-restricted apartments for low-income seniors.
This is the largest housing proposal in the city's current pipeline, and it is just getting started. The city issued its environmental notice in June 2026, and a Draft Environmental Impact Report is still to come. Nothing has been approved. In this post I cover what is there today, who owns it, what is proposed, how the plan has changed, and what is still unknown, including the purchase price, which I could not find in public records.
Paseo Espada is one piece of how San Juan Capistrano is working through its state mandate of 1,054 new homes by 2029. See also my post on the Forster & El Camino apartments approved downtown.
The Project at a Glance
| Item | Details |
|---|---|
| Site | About 15.6 acres at 27122 to 27136 Paseo Espada and 27121 to 27131 Calle Arroyo, southwest of Rancho Viejo Road and directly east of Interstate 5 |
| Applicant | Pendulum Property Partners, LLC (Irvine) |
| Total homes | Up to 247 |
| For-sale homes | 62 two-story detached cluster homes and 129 three-story townhomes, all market-rate |
| Affordable homes | 56 deed-restricted low-income apartments in a four-story building, reserved for seniors age 55 and older |
| Density | About 15.8 homes per acre |
| Status | Environmental review under way. Draft Environmental Impact Report not yet released as of this writing. |
| Groundbreaking and sales dates | None announced |
What the Site Is Today
The property is the Capistrano Business Park, also marketed as Capistrano Business Center I and II. The city's environmental notice describes 14 commercial and professional office buildings totaling about 305,000 square feet, with roughly 81 percent occupancy. Current uses include administrative and professional offices, places of worship, a restaurant, an upholstery shop, and fitness centers. Earlier leasing materials described suites from about 800 to nearly 10,000 square feet, many of them two-story office and warehouse units with ground-level loading, wet bars, and balconies.
The park was built in two phases. Phase I, at 27122 Paseo Espada, dates to 1988 and covers roughly 10 acres and 188,000 square feet. Phase II, at 27121 Calle Arroyo, was built in 1990 and covers about 5.5 acres and 98,000 square feet. The Spanish-style architecture was meant to fit the mission town setting. The land sits within the Ortega Planned Community, a development plan the city first adopted in 1979, which is why the project requires removing it from that plan, along with a general plan amendment and a rezone from industrial to a specific plan.
Who Owns It, and What Was Paid
The owners and the developer. The business park has long been marketed and managed by The Seligman Group, a family-run real estate company founded in 1954 by Irving R. Seligman and based in Southfield, Michigan. The applicant on the housing plan is Pendulum Property Partners, an Irvine firm started in 2016 by Kevin Hayes, the former head of Lincoln Property Company's Orange County office. Pendulum asset-manages commercial properties for Seligman, and the two have done deals together, including the roughly $160 million purchase of the retail portion of Liberty Station in San Diego. Pendulum has also bought large Orange County properties such as One Pacific Plaza in Huntington Beach for $124 million. The project's contact address is a suite inside the business park itself.
The purchase price. I could not find what was paid for the business park or when the current owners acquired it. No news report or public record I found gives a sale price or date, and I do not want to guess. The recorded deed at the Orange County Recorder would show the date and any documented transfer tax. Because the plan came from Pendulum and Seligman, which have a long relationship, the property may have been held for years and not recently sold. I will update this post if I find the figure.
What Is Proposed
| Housing type | Units | Details |
|---|---|---|
| Detached cluster homes | 62 (49 in Phase 1, 13 in Phase 2) | Two-story, with two-car garages and private backyards. About 1,850 to 2,200 square feet, three bedrooms with a loft up to four bedrooms with a loft. Market-rate, for sale. |
| Townhomes | 129 (55 in Phase 1, 74 in Phase 2) | Three-story, alley-loaded, with front doors facing internal streets and landscaped paseos. About 1,590 to 1,760 square feet, three to four bedrooms. Market-rate, for sale. |
| Senior affordable apartments | 56 (Phase 1) | Four-story building with 38 one-bedrooms (about 520 to 670 square feet) and 18 two-bedrooms (about 770 to 905 square feet). Deed-restricted for low-income households age 55 and older. |
| Open space | - | About 70,150 square feet of common space and 64,600 square feet of private space, including paseos, barbecue and shade areas, a children's play area, an internal trail, and drainage basins |
| Parking | - | 481 spaces for the for-sale homes (382 in garages and 99 on the surface) and 56 for the senior apartments |
Phase 1 would hold 160 homes and Phase 2 would add 87. The architecture is described as Spanish, farmhouse, and adobe ranch styles to match San Juan Capistrano's historic and equestrian character. The plan would keep existing businesses in place until their leases expire, though the environmental study assumes a single construction phase with an opening year of 2029. That is a modeling assumption, not a schedule.
How the Plan Has Changed
| When | What happened |
|---|---|
| 2024 | The owner files an application to convert some tenant suites into apartments, then withdraws it before the new proposal |
| July and August 2025 | Pendulum proposes up to 225 for-sale homes, with a first phase of 139 homes. The city council starts a study in August. The staff report at the time did not mention affordable housing. |
| December 2, 2025 | The council unanimously re-initiates the study for up to 250 for-sale units, including 50 age-restricted affordable apartments |
| June 18, 2026 | The city issues its Notice of Preparation for a Draft EIR for up to 247 homes with 56 affordable senior apartments |
| June 25, 2026 | Public scoping meeting held in the Council Chamber. Written comments closed July 20, 2026. |
| Next | Draft EIR, then Planning Commission review, then a City Council vote on the general plan amendment, rezone, specific plan, and tentative tract map |
The December 2025 council vote only restarted the study. The council said it did not mean they intend to approve the changes, and it was not a promise to the applicant. Councilmember Howard Hart said nobody is eager to change anything, but that the council also feels the pull of the state's housing demands and of residents who want their children to live nearby.
The Debate
Displaced businesses and workers. The business park is occupied, and the plan would demolish all of it. One resident wrote to the city that the site lacks the infrastructure for housing of this size, that it would displace existing businesses and workers, and that any residential change should be part of a broader master plan with wider roads, retail, and early involvement from the water district and other utilities. At the December meeting, Mayor John Campbell asked the applicant to come back with how it will support displaced businesses.
Affordable housing. The affordable share has grown from none mentioned in the August 2025 staff report to 56 of 247 homes, or about 23 percent. San Juan Capistrano's inclusionary ordinance asks developers to reserve 10 percent of units for lower-income households or pay a fee, so this plan goes beyond that. All of the affordable units are age-restricted senior rentals, which is a narrower group than the broader low-income need the state counts.
Location. The site is east of Interstate 5 and south of Ortega Highway, with local access from Rancho Viejo Road and Calle Arroyo. The environmental notice says the site is not in a very high fire hazard zone, though the nearest one is about 0.4 miles east. The Draft EIR will study traffic, noise, air quality, utilities, and other topics.
A Realtor's Perspective: What This Could Mean for San Juan Capistrano
It would be a different kind of for-sale housing. San Juan Capistrano has few new for-sale townhomes or small-lot detached homes. A neighborhood of 191 for-sale homes at about 16 homes per acre, along with senior apartments, would be a meaningful addition. No prices have been announced, so I cannot say who it would suit, though the home sizes point toward move-up buyers and families more than entry-level buyers.
The timeline is long. The project still needs an environmental report, two public hearing stages, and several approvals, and then a builder. Even the city's own modeling assumes 2029 at the earliest. Anyone planning around this should treat it as proposed, not coming soon.
Nearby owners. Neighbors around Rancho Viejo Road, Calle Arroyo, and the nearby communities should watch the Draft EIR for traffic and utility findings. Comment periods are the moment to be heard.
Business owners and tenants. If you lease space in the park, the plan is designed to keep existing uses until leases expire, but the long-term direction is clear. It is worth asking your landlord about timing.
Key Numbers
| Metric | Figure |
|---|---|
| Site area | About 15.6 acres |
| Existing buildings | 14 buildings, about 305,000 sq ft, about 81% occupied |
| Built | 1988 (Phase I) and 1990 (Phase II) |
| Proposed homes | Up to 247 |
| Detached / townhomes / senior apartments | 62 / 129 / 56 |
| Affordable share | 56 of 247 (about 23%) |
| Density | About 15.8 homes per acre |
| Phase 1 / Phase 2 | 160 homes / 87 homes |
| Early proposal (2025) | 225, then up to 250 homes |
| San Juan Capistrano housing mandate (through 2029) | 1,054 units |
| Purchase price and date of current ownership | Not found in public reporting |
| Groundbreaking and sales dates | Not announced |
Thinking about buying or selling in San Juan Capistrano? Call or text me at 949-430-7500, or see more on my New Developments in Orange County page.
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