Panasonic Corp. of North America has sold its 540,000-square-foot office and distribution campus in Cypress in one of the biggest industrial deals of the past few years.
The company, a unit of Japan’s Matsushita Electric Indus-trial Co., still has some operations at the facility and is considering whether to keep them there, ac-cording to Pan-asonic and Costa Mesa-based BKM Development Co., which bought the buildings.
BKM paid about $40 million for Panasonic’s two-building campus, which mostly is industrial space, sources said. The buildings include about 100,000 square feet of offices.
The electronics maker already has moved out of its former 204,000-square-foot building at 11130 Holder St. Some operations were consolidated into the 339,000-square-foot building at 6550 Katella Ave., sources said.
Panasonic leased back the Katella building, said Brian Malliet, who owns BKM. He declined to detail terms of the lease, citing a confidentiality agreement with Panasonic.
Malliet said the lease is “short term” with an option for a longer period. Panasonic is considering how much space it needs in Cypress, Malliet said.
“We are going to continue to occupy the campus,” said Panasonic spokesman Will Safer.
Panasonic routinely evaluates its space around the country, considering logistics and other issues, Safer said. The move in Cypress is related to Panasonic’s corporate strategy, rather than anything specific to OC, he said.
Panasonic notified the state Employment Development Department that it planned to cut 85 workers in Cypress in January, according to the department’s Web site.
BKM’s Malliet said some of Panasonic’s large retail customers, such as Best Buy, maintain their own warehouses.
Previously, electronics went from the ports of Long Beach and Los Angeles to Cypress and then to customers. Now they often go directly from the ports to customers’ warehouses, he said.
That means Panasonic needs less space, he said.
Panasonic employed about 600 workers in Cypress prior to the campus sale, sources said. Parent Matsushita is the No. 8 foreign-owned company in OC by employment, with 820 workers in the county, according to the Business Journal’s annual ranking in February.
Matsushita also has a unit in Lake Forest that makes audio video systems for commercial jets.
Malliet already has both buildings up for sale. He said he could get a new owner into the Holder Street building in 30 days.
Steve Batcheller of CB Richard Ellis Group Inc., who represented Panasonic with partners Rick McGeagh and Joshua Bonwell in the sale, is marketing the buildings for BKM.
BKM plans to spend about $750,000 to spruce up the buildings, Malliet said. He said the buildings, built in the 1980s for Panasonic, are in excellent condition and should sell for more than $100 per square foot.
“The market has taken a huge turn on big building requirement sizes,” Malliet said. “There has been a huge demand increase for lease and it’s even hotter for sale.”
He said there are few alternatives for companies that want to buy or lease more than 100,000 square feet of industrial or office space,a sentiment shared by brokers. Cypress has even fewer choices, he said.
Still, the industrial vacancy rate in Cypress at 5.7% is higher than the county’s overall rate of 3.9%, according to Voit Commercial Brokerage LP.
Malliet formed BKM, which are his initials, after leaving Voit Development Co., a unit of Woodland Hills-based Voit Cos., in 2002.
