SA Recycling, one of the largest private companies in Orange County, has purchased an office building in Tustin for $18.2 million, an 11% discount on the property’s last purchase in 2014.
The Orange-based metal recycling company, the ninth largest private company in OC with annual 2024 revenue of $3.4 billion, is the new owner of Tustin Executive Center at 17542 E. 17th St. A grant deed for the center, obtained by the Business Journal, shows that SA Recycling bought the 90,932-square-foot office building from DWS Group, a San Francisco-based asset manager, for about $200 per square feet.
SA Recycling bought the building, developed by Allianz Commercial in 1984, in an off-market deal. Tenants in the office building at the time of the sale included Kaiser Permanente, according to CoStar.
Another tenant, Alliance Funding Group, recently vacated from Tustin Executive Center and relocated to 18231 Irvine Blvd., Tustin, according to a CBRE broker familiar with the deal.
DWS bought the four-floor building at 17542 E. 17th St. in Tustin from Illinois State Board of Investment for $20.4 million in 2014, according to CoStar data.
Tustin Executive Center was described by CoStar as featuring “an attractive brick and glass designed and East 17th Street visibility.”
CoStar also listed CBRE’s Anthony DeLorenzo, Bryan Johnson and Sammy Cemo as brokers on the deal.
Taylor Friend, a commercial real estate broker at CBRE’s Orange County office, said SA Recycling would occupy the building’s entire second floor, or 25,198 square feet.
“SA Recycling has made the strategic decision to purchase 17542 E. 17th Street in the city of Tustin. They saw the writing on the wall as we are seeing millions of square feet of office being demolished and hundreds of tenants being displace.
The office market is changing overnight,” Friend wrote in a social media post about the Tustin Executive Center deal.
“The number of times I have had individuals surprised that we don’t have space to accommodate their requirement is growing rapidly. If you are looking for less than 5,000 square feet, you will be surprised at the limited amount of options.”
SA Recycling, with 125 locations in 15 states, specializes in metal recycling and processing with operations that range from local recycling centers to large recyclers with shredders.
The company has 415 employees in Orange County, according to Business Journal data. CEO George Adams Jr. in 2023 won a Business Journal Excellence in Entrepreneurship Award for leading the growth of the company founded by his father in the 1970s.
Tustin Office Market
The Tustin office market is experiencing a few changes, according to Mike Adams, a managing director at Stream Realty Partners’ Orange County office.
Adams said Tustin is home to 61 office buildings with 1.8 million square feet of space. The direct vacancy for that space, according to Adams, is 15%.
He added that there are only four class A options in Tustin, accounting for 430,000 square feet.
“Tustin Executive Center at the day of close of escrow removed 30,000 square feet of available space from the market,” Adams told the Business Journal. “Couple this with office demolitions, we forecast the market will get competitive quickly as tenants looking for quality assets could look to neighboring cities. This could pose a problem as we have found that business owners that live in Tustin have in times past been hesitant to commute out of Tustin city limits.”
Orange County Market
SA Recycling bought Tustin Executive Center as an owner-user. Adams said Orange County has an active owner-user market, with 17 transactions totaling more than $238 million over the past year.
“Core Irvine assets continue to command premiums in the $260–$280 per square foot range, while secondary markets such as Anaheim, Santa Ana, and Tustin are trading closer to $180–$205 per square foot,” Adams said.
“The average on a price per foot for all of these transactions is $233 per square foot, which is 13.7% lower than the 5-year average, reflecting steady demand from well-capitalized companies looking to capitalize on discounted pricing and positioning themselves for long-term occupancy,” Adams continued.
“Looking ahead, pricing should remain stable in the $230–$250 per square foot range, with Irvine area and South County submarkets leading the way.”
