BKM Development Co., best known for buying, fixing up and selling smaller industrial buildings, is thinking bigger.
The Costa Mesa-based real estate development company just sold for $60 million a Cypress warehouse that’s now home to shoemaker Vans Inc. The deal is one of the larger industrial sales in the county this year.
Now BKM is considering putting up a sizable office building in its hometown, according to Brian Malliet, the company’s managing partner.
The deals are a change for BKM.
The company bought close to 300 buildings totaling about 4 million square feet of space in the past four years, most of it smaller industrial buildings.
Larger office and industrial deals are starting to grab more of BKM’s attention.
The company bought the Cypress building in 2005, paying $40 million for the 554,000-square-foot office and distribution campus. The buy was 2005’s largest Orange County industrial deal not related to Lennar Corp.’s land buys in Anaheim’s Platinum Triangle.
The site has been home to Matsushita Electric Industrial Co.’s Panasonic Corp., which has shifted some distribution operations out of Cypress and still has some space at the campus.
BKM fixed up the site and last month leased 104,000 square feet of it to Vans, part of Greensboro, N.C.-based VF Corp.
Then BKM turned around and sold the campus to Colony Capital Advisors LLC of Los Angeles for $60 million, 50% more than BKM paid for it last year.
The sale wasn’t easy.
After fixing up the site and putting it up for sale, the Cypress campus fell out of escrow twice, Malliet said. That was largely due to a month-to-month lease that Panasonic holds, which scared off potential buyers.
Vans’ 10-year, $15.3 million lease helped spur interest. The company recently moved its corporate headquarters back to Orange County from Santa Fe Springs.
Vans, known for skateboarding shoes and clothes, started in Anaheim in the 1960s.
Possible Office Building
More projects could be on the way for BKM.
The company is in escrow to buy a two-building, five-acre site at Redhill Avenue and Baker Street in Costa Mesa, Maillet said. The site is home to a distribution facility for the Los Angeles Times.
BKM is considering putting up a three-story office building as big as 75,000 square feet at the site, once the Times’ lease expires in two years, Malliet said. BKM could face height issues for any development on the site near John Wayne Airport, he said.
Another option: spruce up the site’s existing industrial buildings, which total 45,000 square feet, and build three smaller industrial buildings alongside them.
The Redhill site is down the street from one of BKM’s larger developments, the Redhill Business Park. That Costa Mesa project totals about 171,000 square feet with 19 industrial condominium buildings.
More Industrial
BKM plans another office condo project nearby. The company just paid $9 million for 17500 Redhill Ave., which now holds 44,000 square feet of older office space.
The company is looking to get the site rezoned and develop the office condos as the Red Hill Corporate Centre.
BKM also has plans in Corona.
The company is paying $8 million to the federal government for 30 acres on the border of Orange and Riverside counties.
The land now is zoned as park space. BKM plans to push for rezoning for possible office and industrial development with some public storage space and stores, Malliet said.
