Comments by Costa Mesa city officials suggest that skate shoe and apparel company Vans Corp. is looking to build a sizeable expansion to the company’s planned new headquarters in the city.
An affiliate of Greensboro, N.C.-based VF Corp., Vans’ parent company, entered into a contract last month to buy 1588 South Coast Drive, an 180,000-square-foot office in Costa Mesa.
The building, which faces the San Diego (405) Freeway and is next to the South Coast Collection retail center, once held the headquarters of ICN Pharmaceuticals Inc., whose name was later changed to Valeant Pharmaceuticals International, but has sat largely vacant for several years.
Vans is paying about $52.3 million, or about $290 per square feet, for the office, according to regulatory filings. The company, Orange County’s fifth largest apparel company by employee count and its largest by revenue, plans to move its operations from Cypress to the new building.
The deal was initially scheduled to close by the end of June but was pushed back a few days to allow for extra due diligence on the part of the buyer, according to Irvine-based Banc of California Inc., which is selling the building. The bank paid $40 million for it in 2013.
There’s excess land at the 15-acre site that would be large enough to hold an additional 100,000 square feet or so of new office space, although it appears the new owner isn’t looking to expand by that much.
Costa Mesa Councilman Jim Righeimer said late last month that Vans was looking to build a 40,000-square-foot addition to the building.
Specifics of the proposed expansion haven’t been announced. Along with any new buildings, it’s expected that Vans would add a skate park or other outdoor amenity compatible with its business, according to brokers familiar with the deal.
Righeimer’s comments were in response to a recently proposed initiative by city residents that would give them the power to vote down larger residential and commercial developments, much in the same manner as Newport Beach’s Greenlight initiative, which has been on the books for about 15 years.
A similar initiative in Costa Mesa would have put the expansion of the South Coast Drive office in doubt and could have kept Vans from moving to the city and bringing in about 500 jobs, the councilman said.
Sports and Storage
Ladera Ranch-based SmartStop Self Storage Inc. appears to be putting some of the proceeds from a recent $1.4 billion sale of its properties to use in its hometown.
The company, an owner of 169 self-storage facilities across the country that previously operated under the Strategic Storage Trust Inc. name, recently broke ground on a $35 million multiuse facility a few blocks from its headquarters on Terrace Road.
About half of the 120,000-square-foot development is related to SmartStop’s business: a 42,000-square-foot storage facility and 15,000 square feet of office space.
The remainder of the project is sports-focused. The company is building the Ladera Sports Center, a 60,000-square-foot gymnasium with eight full-sized basketball and volleyball courts, a 3,380-square-foot strength and conditioning space, student study rooms, and gym offices. The center will be open to the public.
The project is scheduled to be finished by next summer.
“My family has lived in Ladera Ranch for more than 13 years, and we strongly believe in this community,” said SmartStop Chief Executive H. Michael Schwartz in a news release.
“This new sports facility will create additional jobs and generate more visitors to retail and restaurants with the goal of placing Ladera Ranch on the map.”
The developer said it’s looking for sponsors of the sports center, both national brands and local businesses.
SmartStop paid $3.9 million in 2011 to buy the 3.6 acres for the development, according to regulatory filings. The site is near Antonio Parkway and is one of the last pieces of undeveloped commercial land in Ladera Ranch.
SmartStop also paid $17 million for a nearby self-storage facility in Ladera Ranch as part of the 2011 deal. The 102,000-square-foot property is its flagship facility.
Last month, SmartStop announced it was selling a bulk of its portfolio to Salt Lake City-based Extra Space Storage Inc. for $1.4 billion in a deal expected to close this year.
The sale represents a 27% premium over SmartStop’s most recently announced net asset value and results in an average annual return on investment in excess of 15.3%, according to Schwartz.
