Tile mogul Larry Bedrosian continues to expand his real estate holdings here.
With a 375,000-square-foot buy in Anaheim in September, Bedrosian has more than 3 million square feet of industrial space.
Many of his buildings are in Anaheim and Tustin. He also owns buildings in Corona, Sylmar and Las Vegas.
Much of his real estate serves his company, Fresno-based Bedrosians, which sells tiles and stone slabs for kitchens and bathrooms. Larry Bedrosian also leases space to other companies.
In the Anaheim deal, Bedrosian paid more than $24 million for a building on 1515 E. Winston Road. In April, he had leased the building with an option to buy.
The Winston Road building is near Anaheim’s “tile mile” as well as the intersection of Ball Road and State College Boulevard.
In another Anaheim deal, Bedrosian recently leased his 122,000-square-foot warehouse building at 710 Ball Road to Rocky Mountain Stone. The five-year lease is for $4 million.
Earlier this year, Bedrosian moved some operations from Ball Road to Winston Road.
Jeff Chiate and Rick Ellison of Cushman & Wakefield Inc. represented Bedrosian in the Anaheim deals.
Brad Bierbaum and Ian Britton of CB Richard Ellis Group Inc. represented Irvine’s Sares-Regis Group, which owned the Winston Road building.
The biggest jump in Bedrosian’s holdings came in 2003, when he bought a 500,000-square-foot industrial building at Steelcase Inc.’s former Tustin campus.
Originally, Bedrosian planned to consolidate much of his Anaheim and Corona tile operations in Tustin. But when the Winston Road building became available, Bedrosian took the opportunity to move closer to tile mile, according to broker Chiate.
In late 2003, Bedrosian leased half of the former Steelcase building to Ricoh Electronics Inc., which consolidated two assembly plants there. Ricoh, a unit of Japan’s Ricoh Co., makes copiers and fax machines.
Demand for granite and tile among homebuyers is helping to drive Bedrosians’ expansion. Some of Southern California’s biggest homebuilders, such as KB Home and Lennar Corp., use Bedrosians’ tile or countertops.
Investing Overseas
CNNMoney last month had an interesting story on Tom Barrack, who runs $25 billion Colony Capital, one of the largest private equity firms dedicated to real estate.
The gist of the article is that Barrack has been investing heavily overseas because he thinks real estate has become overpriced in the U.S. Yields on commercial properties are too low, he told CNNMoney.
Rising prices of construction materials and labor are set to kill the real estate bubble, he said.
“Construction costs have spiked 20% in the past nine months,” he said.
He cites shortages of labor and materials as well as higher oil prices as reasons for costs to keep going up. Oil is used to make everything from plastic piping to shingles.
I mention his theory because developers here often have cited the rising cost of materials as a headache for them. The problem, they said, is presales.
Both commercial and residential developers sell their buildings before construction is completed these days. That works well when retail prices are rising and costs are stable or falling. But what if prices plateau while costs continue to rise?
Canada’s Bosa Development Corp., for example, signed contracts with buyers of twin high-rises in Irvine, more than a year before the condominiums were set to be finished. Meanwhile, Bosa has said its costs have increased.
I’d like to do something different for this column: get reader’s opinions on Barrack’s theory. Anyone interested in sending me a paragraph on why or why not this is a serious issue: padilla@ocbj.com.
Foreclosures on homes increased 22% in Orange County in September versus August, according to RealtyTrac Inc. in Irvine.
In September, 259 homes in the county entered some stage of foreclosure. That amounts to one foreclosure for every 3,743 households, according to RealtyTrac. That ratio is lower than state and national averages.
OC’s peak came in January, at 277 homes, according to Rick Sharga, vice president of marketing with RealtyTrac. January is the month RealtyTrac began issuing reports on local foreclosures.
RealtyTrac’s revenue comes from selling access to its database of foreclosures, Sharga said.
Los Angeles County saw a 4.9% increase in foreclosures in September, marking the second consecutive month of higher foreclosures.
In related news, the median price of a house sold in OC dropped 1% in September versus August to $708,840, according to the California Association of Realtors. The median excludes condominiums.
The median price was up 11.9% from a year ago.
OC sales followed the trend, with an 11.8% drop from August but a 19.2% increase versus a year ago.
California’s median price dropped 4.4% from last month, and increased 17.3% from last year.
