An investment group in Laguna Niguel that’s best known for its restaurant and grocery chain investments, including in Sprouts Farmers Market, is turning its attention to Orange County’s industrial market.
The Horowitz Group, which has been in business for nearly 30 years and made many investments in private businesses and a variety of real estate types, recently closed on the buy of the 11-building McFadden Center business park in Santa Ana.
Located on 13 acres just off the Costa Mesa (55) Freeway on McFadden Avenue, the park totals about 185,000 square feet and was about 98% occupied at the time of the sale.
McFadden Center includes eight flex and industrial buildings designed for smaller tenants—occupants average a little less than 2,000 square feet, the largest about 9,000 square feet.
The complex also has a multitenant retail building, a Burger King and a Wienerschnitzel. It brings in more than $2.4 million in annual rent, according to marketing materials from the Irvine-based capital markets group of Lee & Associates, whose Kurt Bruggeman and Ryan Swanson brokered the deal.
Terms of the deal weren’t immediately disclosed. McFadden Center was offered for nearly $40 million, or roughly $216 per square foot.
It’s among the family office’s first industrial deals, but more could come, said President Adam Horowitz.
“Industrial is a focus for us now. We can move quickly (on other deals).”
First though, the new owners plan a renovation of the recent purchase.
“We’re planning substantial investments,” Horowitz said. “We like to take a long-term, generational approach” to the company’s holdings.
Horowitz Group will work with Bryan Bentrott, president of Newport Beach-based Summit Development Corp., to upgrade the property. The longtime industrial investor and developer is a minority partner in the McFadden Center venture and worked with the Horowitz family on earlier deals.
“We like to partner with seasoned people,” Horowitz said.
Concrete to Private Equity
The family made its first fortune in the concrete business, owning and running Santa Ana-based Standard Concrete for nearly 40 years until selling it in 1990. The ready-mix concrete maker was reported to have annual revenue of $75 million at the time of the sale to CBR Cement Corp. in San Mateo.
David Horowitz, Adam’s father and Standard Concrete’s president at the time of the sale, is chairman of Horowitz Group.
Since the 1990 sale, made on undisclosed terms, the family has turned its attention to private equity investments and real estate deals, using its own capital to fund a variety of businesses.
It was one of the first backers of Sprouts Farmers Market, and helped the now Phoenix-based healthy grocery chain grow to more than 200 locations. More recently it invested in Los Angeles-based Lemonade Restaurant Group, a healthy-food chain with locations at Fashion Island and Irvine’s Park Place.
In 2015, it took “a significant minority stake” in Asian Box Holdings Inc., a fast-casual restaurant chain based in Palo Alto that has four Southern California locations, including one in Irvine.
Real estate investments include an apartment portfolio in the Pacific Northwest totaling nearly 1,200 units, Horowitz said.
Its biggest OC property is Plaza de la Paz, a nearly 300,000-square-foot shopping center in Laguna Niguel that’s home to the company’s headquarters and a Sprouts market.
Olen, Wen
McFadden Center has been owned by some of the area’s wealthiest investors over the past few years.
Newport Beach-based Olen Properties Corp., whose president, Igor Olenicoff, has an estimated $4.2 billion fortune, paid a reported $24.5 million for the business park in 2012.
Olen sold the property in late 2014 for about $31.7 million to a real estate entity affiliated with local businessman Joe Wen.
Wen, who heads Cypress-based high-end paper products provider Sakura Paper Inc., owns multiple area commercial real estate properties, including the Foothill Ranch office complex that holds the headquarters of mortgage lender LoanDepot Inc.
He also built Crystal Cove mansion Villa de Formosa, which, at 52,000 square feet, is believed to be the largest home in OC.
The Horowitz Group is the second notable family investor with ties to the concrete industry that’s made an investment in Santa Ana over the past 18 months or so.
Dennis Troesh, a wealthy Riverside County businessman and real estate investor who previously owned Corona-based Robertson’s Ready Mix and is a large investor in data center operator Switch Inc., belongs to an investment group that state filings show quietly bought a six-acre site next to the Santa Ana Zoo in 2016. A 601-unit apartment project has been proposed for the site.
Relatives of Troesh, whose fortune Bloomberg estimates at more than $2 billion, own a few other apartment complexes elsewhere in OC.
