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Orange County’s industrial sector often is seen as a small-tenant market, with fewer and fewer big leases being struck.
But some recent brokerage data suggests it’s the market for midsize industrial tenants that’s actually seeing the least amount of activity.
A report last month by the local office of Grubb & Ellis Co. compiled the county’s lease transactions so far this year and broke up the deals by size, in groups of 10,000 square feet.
For the roughly 6.5 million square feet of leases profiled, the data suggest a heavy amount of small deals of less than 30,000 square feet and a few big ones running more than 100,000 square feet, but not too many in between.
Grubb & Ellis reported a total of 104 leases in the county running from 10,000 to 19,999 square feet, totaling about 1.4 million square feet. Another 58 deals in the 20,000- to 29,999-square-foot range also were about 1.4 million square feet.
Most of the smaller deals were signed around John Wayne Airport and in Anaheim, with the fewest deals in South County and the Huntington Beach area.
For the big, news-making deals exceeding 100,000 square feet, there have been 11 leases reported so far this year, totaling about 1.8 million square feet.
Four of the bigger deals were in North County, three were struck around John Wayne Airport and another three were in South County.
For deals totaling 30,000 square feet to 99,999 square feet, the volume drops noticeably. The brokerage only reported 43 deals of this size being signed this year, totaling about 2.1 million square feet. Most of those deals were on the smaller side of the range. In the 60,000- to 99,999-square-foot range, there were only nine leases reported.
The county’s average asking monthly rental rate now runs about 94 cents per square foot, up about seven cents from a year ago. This is the fifth consecutive year that rental rates have gone up, Grubb & Ellis said.
Westline Relocates
Westline Corp., a Cypress-based auto insurance company, is moving its headquarters a city over.
The company just signed a seven-year lease at 6722 Orangethorpe Ave., part of a two-building complex in Buena Park.
Westline will be taking 37,625 square feet at the complex, which totals about 97,000 square feet. Terms of the lease weren’t disclosed. Space at the building had been listed at monthly rates of $1.85 per square foot earlier this year.
The insurance company is slated to move into its new offices in March. The company is roughly doubling the space it had in Cypress.
Gary McArdell and Tom Taylor of Grubb & Ellis’ Newport Beach office and Lonnie Riddle of the brokerage’s Anaheim office represented Westline in the lease.
Rick Warner of CB Richard Ellis Group Inc.’s Anaheim office represented the landlord, Yamaha Corporation of America.
Shaw in Downey
Shaw Properties of Newport Beach, one of the first developers of small buildings for sale in the Irvine Spectrum, has turned its sights toward the city of Downey.
The company is under construction with Cornerstone Commerce Centre, a 50-building, 200,000-square-foot small industrial building project just west of the San Gabriel River (605) Freeway at Firestone Boulevard. The project is scheduled to be completed early next year.
Shaw bought the 9-acre site for $9.5 million and demolished an existing 143,000-square-foot building on the property.
Individual building sizes at the development will range from 3,200 to 5,000 square feet, with the ability to combine multiple buildings, according to Kevin Klemm, owner of Shaw Properties.
Preliminary pricing for these buildings are from $600,000 to $900,000. Cornerstone is being marketed by Clif Fincher and Brad Gilmer of Lee & Associates Commercial Real Estate Services Inc.’s Orange office.
Locally, Shaw was behind projects such as Irvine’s Goddard Business Center and MK Business Center. Prior to Cornerstone, the company’s most recent project was Citrus Woods Business Center, a 62,000-square-foot development in Corona.
The $30 million development, near Interstate 15 and the Riverside (91) Freeway, was built on a site that previously held a Sunkist processing plant. Shaw bought the 90-year-old plant at a foreclosure sale for a reported $4.2 million. The previous owner, High Country, a natural juice company, sold the building to help pay off the company’s debts.
Duke Makes First Area Buy
The Newport Beach office of Indianapolis-based Duke Realty Corp., one of the country’s larger office, industrial and retail developers and property owners, made its first local deal.
Duke bought a 16-acre site in Rialto, where it plans to build a 352,000-square-foot industrial building on the site. Construction will begin next summer. Duke established a local office in February.
