Orange County Business Journal

From Haute to Hip in Airport Area

Obey Takes Former St. John Knits Space in 170,000-SF Lease Mark Mueller Saturday, April 20, 2013
2722 Michelson: St. John departed in 2011

2722 Michelson: St. John departed in 2011

The privately held company does not disclose sales figures; documents related to a copyright lawsuit between Obey Clothing and The Associated Press over the use of the Obama artwork show the company had revenue of $24.4 million and a profit of $4 million in 2009.

A settlement between Obey Clothing, Fairey and the AP was struck in 2011.

Development Delay

Obey Clothing’s deal at 2722 Michelson, along with a lease of land at an adjoining property, appears to push off the potential of any new office development at the high-profile site for at least a few more years.

California Green, a 705,500-square-foot office campus development, has been proposed for the entire block that holds 2722 Michelson.

St. John Knits sold its property in 2006 to Houston-based developer Hines Interests LP and pension fund California Public Employees’ Retirement System.

St. John then inked a five-year deal to lease back a portion of the facility. It moved its operations and workers to other area buildings after that lease expired in 2011.

Affiliates of New York-based insurer American International Group Inc. owned a loan tied to the former St. John Knit property and took over ownership of the 2722 Michelson building through foreclosure in 2011.

Hines and financial partner CalPERS still own the remainder of the land on the same block of the former St. John building, along Jamboree Road from Michelson Drive to Teller Avenue.

Several other older industrial buildings on that block have been razed in recent years.

The land Hines and CalPERS still own is believed to be debt-free, and a 1.6-acre portion of that property was recently leased to Avis Rent A Car as an auxiliary lot, in a three-year deal, according to Tomaselli.

1st, 2nd Phases

The first phase of the Hines-backed California Green development was to include the already-razed land, while a second phase would call for the demolition of the St. John building.

A time frame for either of those two phases of development moving ahead has not been disclosed and would call for Hines and CalPERS to work with AIG on the second phase.

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