Larry Tarpley is part of the incidental fallout of a grand plan to transform the area around Angel Stadium of Anaheim.
After 25 years, Tarpley said he thought he’d never leave Anaheim. But his printing business recently was evicted from its office near the Big A.
Tarpley wasn’t late with the rent. His landlord sold his office building in Golden West Business Park to homebuilder Lennar Corp.
Miami-based Lennar, which has its regional headquarters in Aliso Viejo, plans to raze the office park to make way for high-rise and other homes in Anaheim’s Platinum Triangle, the city’s name for the area around the stadium.
The vision of Anaheim Mayor Curt Pringle: a bustling enclave of condominium towers, stores and restaurants. The goal is to provide homes to a housing-starved city and to draw more people to the area, building on the popularity of the stadium and the Arrowhead Pond of Anaheim.
Tarpley said his seven-employee business, Stadium Printing Inc., had great exposure on busy Katella Avenue.
“I intended to do business there probably until I retired,” he said.
Now Tarpley is across the city line in Orange, close enough to keep the Stadium Printing name.
The company is one of about 125 small businesses in buildings bought or being acquired by Lennar, according to Louis Tomaselli, a senior vice president with Voit Commercial Brokerage LP.
Tomaselli and his partner Mitch Zehner have coordinated Lennar’s buy of some 30 properties with about 50 buildings in the Platinum Triangle. In one major deal last year, Lennar bought two commercial parks with 88 tenants, he said.
Even more businesses are relocating from the Platinum Triangle as six other residential developers have bought property and submitted plans to Anaheim.
Windstar Communities, the residential arm of San Diego-based Nexus Properties Inc., demolished a two-story office building and two restaurants to make way for 390 luxury apartments near the corner of Katella and State College Boulevard in the heart of the Platinum Triangle.
Market Forces
The city is pursuing its plans for the area without using eminent domain. Anaheim changed its general plan last year to allow 9,175 condominiums and apartments and is letting the hot housing market do the rest.
It seems to be working. Developers have submitted plans to Anaheim to build about 5,314 condominiums and apartments on 85 acres.
The players range from local developers to national homebuilders such as Lennar and D.R. Horton Inc., based in Fort Worth, Texas.
Not everyone’s complaining.
Businesses that own-ed their Platinum Triangle buildings are seeing a windfall. They and other property owners are selling to Lennar and other developers at top prices for residential land.
Lennar has paid as much as $4 million an acre,a price only seen in select areas of Irvine and coastal cities.
Business owners who’ve sold are taking their profits and buying small commercial buildings in Anaheim or in other cities. Some are moving to pricier areas such as Irvine, Voit’s Tomaselli said.
John Funk, whose company makes tradeshow exhibits, said he owned a building in the Platinum Triangle and leased another. He made enough profit on the sale of his 10,000-square-foot building to Lennar to buy a 27,000-square-foot building in Lake Forest and move his operations there, he said.
Funk said he wanted to keep his company, Skyline Orange County, near the Anaheim Convention Center. But he said he couldn’t find a space of about 30,000 square feet for sale.
Funk’s Lake Forest site is accessible to customers, who tend to be in Orange, Riverside and San Bernardino counties, he said.
“When I started looking in South County, I started finding a lot more opportunities down there,” Funk said.
Business owners relocating from the Platinum Triangle are bidding up the price of buildings and land at North Anaheim Indus-trial Park, said Brian Malliet, who heads Costa Mesa-based BKM Development Co.
Malliet said he’s had four offers for land “all from users in the Triangle that are getting displaced.”
Buildings are selling for 20% more than several months ago at $155 to $175 per square foot at his project, Malliet said. Industrial land now is selling for a little more than $30 per square foot, up about $10 from several months ago, he said.
Voit’s Tomaselli said the relocations are having a big impact on Anaheim’s commercial market, which was tight before the city started tinkering with its general plan.
Prices of small buildings and rents in general are on the rise, as landlords and developers gain the upper hand in negotiations, according to Tomaselli and developers with projects in Anaheim.
Anaheim’s office vacancy of 7% is lower than the county’s rate of 9%, according to Voit’s most recent market report. The city’s industrial vacancy is even lower at 3.3% versus the county’s average of 3.9%, which is one of the lowest in the country.
“The small amount of vacancy we have is filling up,” Tomaselli said. “Many projects now have 100% occupancy and waiting lists.”
The Platinum Triangle accounts for roughly a third of all office space in Anaheim. There’s 2.4 million square feet of offices there, or 32 buildings, versus 9 million in the city, according to CoStar Group Inc. and Jerry Holdner, vice president of market research with Voit.
Industrial Hub
The triangle’s 5.8 million square feet of industrial space, roughly 240 buildings, make up 11% of all industrial space in Anaheim.
The number of businesses impacted has grown rapidly during the past year as housing developers bought 85 acres of land there. Lennar alone plans to raze about 50 buildings.
Some companies, such as Tarpley’s, are leaving Anaheim as a result.
Tarpley said he wanted to stay in the city but couldn’t find space he liked at a price he could afford. He had to take a second mortgage on his home to pay for the move to Orange, he said.
The city has an adequate amount of commercial land in other areas, said Sheri Vander Dussen, Anaheim’s planning director. One of the largest commercial swaths in OC is along La Palma Avenue, an area Anaheim has dubbed The Canyon.
