An unnamed local distribution company has agreed to purchase a 281,500-square-foot office and warehouse building being built on the former Medtronic Inc. site in Anaheim for its headquarters.
Finding a buyer this early in the game is the best scenario Monterey-based developer Tom deRegt could have imagined.
In the fall, his company, deRegt Development Inc., paid $7 million for roughly 12 acres of the old Metronic land,the first venture into Southern California for deRegt’s Northern California outfit.
With the purchase, two scenarios were on the table: fix up the existing 100,000 square feet of industrial buildings for multiple users or shoot for the moon by demolishing the property and building a single, brand-new facility on speculation.
“We purchased approximately 100,000 square feet of existing industrial space with the idea of rehabbing and adding another 100,000 square feet,” deRegt said.
Market conditions spurred the change from rehabbing old buildings to developing a high-end industrial center, said Jim deRegt of the Newport Beach office of Lee & Associates, Tom deRegt’s brother.
“In marketing the project, we noticed a lot of pent-up demand for small to midsize buildings,” Jim deRegt said. “The market demand made the prices go up high enough to generate this type project. If the demand hadn’t been there, we would have rehabbed or built several, smaller buildings.”
Demolition began in March and, at the time, the project was proceeding on a spec basis.
“But then we were able to find a user,” Tom deRegt said.
Pat Delaney of Lee & Associates’ Orange office brought in the local distribution company, and a deal was signed. Financial details were not disclosed.
Construction of the new building began in July, with completion slated for January.
DeRegt was coming out of a 1031 exchange,which allows property sellers to defer taxes by putting sale proceeds into a new property,in Northern California and was looking for a value-added project.
Although his firm had not entered the OC market before, deRegt was familiar with the area through his brother, who specializes in the industrial sector.
“This was an in-fill property in an area with low vacancies,” said Tom deRegt. “And it’s an area that has received an upgrade and redevelopment in recent years.”
Nearby neighbors include YKK Zipper, a division of Japan’s YKK Corp.; Anaheim-based OCIP, a plastics manufacturer and distributor; and Skokie, Ill.-based Anixter Inc., a distributor of data communication products and electrical wire and cable.
The deRegt project, at the corner of La Palma and Hancock avenues in Anaheim, is on the fast track, according to Kevin Smith, director of marketing for Irvine-based W.L. Smith, who is the general contractor on the project.
“There were three buildings we demo’ed and we’ve now poured slab and will have the walls tilted as of Sept. 25,” said Smith. “We’re one month ahead of schedule.”
Tustin-based Handley Engineering provided architectural design. Orange-based DSA Development was brought in as a consultant on the project.
With the modified plan, the project is one of the largest tilt-up projects in OC this year, according to Jim deRegt.
“There’s the 191,000-square-foot O’Donnell project in West Anaheim,” he said. “But this project is right up there.”
Upon completion, the 281,500-square-foot industrial facility will house a 32,000-square-foot corporate office pod, including a 16,000-square-foot showroom, and connect to nearly 250,000 square feet of distribution and warehouse space.
“There will be 35 docks,” with 30-foot clearance, according to Jim deRegt.
The project includes 471 parking spaces and the size of the facility will allow the distribution company to expand from its present 60 employees to about 100, Jim deRegt added. n
