Taiwan’s Foxconn Electronics Inc., one of Orange County’s largest contract electronics makers, has closed its Fullerton operations.
The company, which makes PCs, components and telecommunications gear, has moved most of its local workers to the City of Industry in the past few weeks, according to real estate brokers. Foxconn also operates under the Q-Run Technology Co. name.
A large portion of the company’s local operations already had been relocated to a plant in Dallas earlier this year.
Foxconn, a unit of Taiwan’s Hon-Hai Precision Industry Co., had been leasing nearly 406,000 square feet of space in the Fullerton Distribution Center, on East Lambert Road near the city line with Brea.
The building,one of the larger industrial spaces in OC,largely is empty now and is being marketed for lease by the local office of CB Richard Ellis Group Inc.
At its peak, about 800 Foxconn workers had been employed at the Fullerton site, which was used for computer assembly. The company has seen a few rounds of layoffs during the past year.
The Business Journal estimated that the company employed about 600 people at the 18-acre Fullerton site as of last November.
Based on employee count, Foxconn had been OC’s second-largest contract electronics maker, behind Santa Ana’s Express Manufacturing Inc., according to the Business Journal’s November list.
The company used the Fullerton space to assemble PCs and enclosures for networking products. Its customers included Hewlett-Packard Co., Intel Corp. and Cisco Systems Inc.
Its new location in the City of Industry is a slimmed-down 226,000 square feet.
The company is subleasing space at the new location, which is owned by office furniture company Steelcase Inc., according to Shan Lee, executive vice president with Daum Commercial Real Estate Service’s City of Industry office, who represented Foxconn in the lease.
Cost cutting was the main reason behind the move, according to Lee.
The company got a much cheaper rate for the sublease space than it could have gotten for a portion of the Fullerton property, which was acquired by ING Clarion Partners LLC, a unit of ING Groep NV, about two years ago. Terms of the company’s new lease weren’t disclosed.
Foxconn’s departure adds another sizable empty building to OC’s industrial market, which is seeing its highest vacancy rates in about five years. The county’s availability rate for industrial buildings now stands at about 11.2%.
More than 2.3 million square feet of empty industrial space in OC was returned to the market in the first half of the year, according to data from the Irvine office of Colliers International.
Brokers for the Fullerton property are optimistic a replacement tenant can be found, due to the size and modern features of the property.
The distribution center is likely the largest high-end industrial property that’s available for tenants in the market between North OC and South Los Angeles, according to Ben Seybold, senior vice president in the Anaheim office of CB Richard Ellis.
The building, which can be divided into a 233,000-square-foot section and another 172,000-square-foot section, has received some preliminary interest from prospective tenants, according to Seybold.
Lease rates for the property are still being determined, he said.
ING Clarion paid about $40 million to Invesco Realty Advisors for the Fullerton Distribution Center in 2007. The center sold for close to $98 per square foot.
At the time of the acquisition, ING Clarion officials said the current rent paid by Foxconn was substantially under market, and the deal provided significant upside when the lease expired.
The departure of Foxconn is the second major employer Fullerton’s recently lost.
Foxconn had been Fullerton’s fourth-largest industrial company, based on employees, according to city figures.
Beckman Coulter Inc. employs another 1,250 people in Fullerton and has been the city’s second-largest industrial tenant. The medical diagnostic and research products company is relocating to a nearby 500,000-square-foot location in Brea next year.
Beckman still is figuring out what its plans are for its existing campus, a 55-year-old complex on North Harbor Boulevard, which it owns.
Raytheon Co. is the city’s largest industrial tenant, with an estimated 1,500 people working at the defense systems company, according to the city.
Foxconn had been OC’s 19th largest foreign-owned company here,based on employees,according to the Business Journal’s most recent list in January.
