Irvine Company Veteran and Bain Partner on SoCal Townhomes

A former Irvine Company executive has made a bet on Bain Capital Real Estate and townhomes for Southern California renters.

Chris Marsh, now head of Newport Beach-based Cherry Tree Capital Partners, has linked up with the Boston-based investor to build townhomes targeted to millennial renters, the Orange County Business Journal reported.

The joint venture, called BCT Development, aims to build an unspecified number of homes for young people born between 1981 and 1996, now priced out of home ownership.

The partnership is buying land at undisclosed sites, while looking to build attached homes in Orange, Los Angeles, San Diego, Ventura, San Bernardino and Riverside counties. The venture says it plans to deploy “several hundred million dollars of gross capital over the next several years” in the strategy.

“Homeownership affordability is at a 40-year low,” Marsh told the Business Journal, adding that the Class A properties will have a “home-sweet-home feel with multifamily density.”

Each townhome will have its own front door and yard, despite being closely packed to make sense of California land prices, he said. Each development, built close to schools and entertainment venues, will have swimming pools and other features.

“We’re drastically undersupplied with housing,” Marsh told the newspaper. “These townhomes will serve as the ‘missing middle’ rental housing product that will help meet the currently underserved demand from middle-income families.”

Marsh, with 30 years of commercial real estate experience, worked at the Newport Beach-based Irvine Company for 18 years as president of its Apartments Division, with a portfolio of 62,000 units. He also presided over the construction of 22,000 apartments, which cost $10 billion, during the fastest period of growth in the company’s history.

In 2021, Marsh left the firm to found Cherry Tree, which focuses on multifamily properties in key U.S. markets, according to its website.

The British-born son of factory workers led Cherry Tree to team up with Revitate, a Newport Beach-based investment firm, to buy older “workforce” apartment complexes in the Midwest. The Class B apartments, built in the 1980s and 1990s, are located in suburbs with low crime, good schools and areas of expected job growth.

To date, the firms have bought 2,000 workforce units through their joint funds, with the first raising $110 million to buy properties in cities such as Kansas City, Mo., Omaha, Neb., and Elkhart, Ind. In November, Cherry Tree and Revitate launched a second fund to raise $150 million.

The joint venture’s other partner, Bain Capital Real Estate in August joined with Bardas Investment Group to gain approval to build a $450 million entertainment studios complex in Hollywood. The 5-acre, 510,600-square-foot project would replace a former Sears store at 5601 Santa Monica Boulevard.

— Dana Bartholomew