Boeing Co. is nearing a deal to sell more than 1 million square feet of industrial and office space in Anaheim.
The local arm of Sacramento-based developer Panattoni Development Co. is expected to close on a deal to buy the sprawling Boeing site in the next few weeks, according to real estate sources.
Terms of the deal are unknown. It is estimated Panattoni is paying $35 to $40 per square foot for roughly 1.1 million square feet of space in Anaheim’s The Canyon, the largest base of industrial space in the county.
Boeing last year announced plans to leave its decades-old Anaheim campus and shift local workers to Huntington Beach.
Panattoni is said to have outbid a number of potential buyers and has made at least one non-refundable deposit for the property.
Officials for the company declined to comment.
Long Beach-based Boeing Realty Corp. is handling the sale.
The deal is expected to include a leasing back of some space by Boeing. That could keep some of the company’s remaining Anaheim employees, who work in Boeing’s Integrated Defense Systems division, at the site for longer than first expected.
Boeing said in July 2006 that it planned to shut down and sell its Anaheim campus and move about 3,700 employees to Huntington Beach during the next four years. A good percentage of those workers are expected to move next year.
Boeing had been Anaheim’s second-largest employer, after Walt Disney Co. It and companies it acquired have had operations in the city since the late 1950s.
Early plans call for a major campus-style redevelopment with more office space than industrial buildings, according to sources.
Boeing owns about 18 industrial and office buildings in The Canyon, the 2,645-acre business park in east Anaheim. The company’s operations are the centerpiece of Anaheim’s industrial corridor along La Palma Avenue near the Riverside (91) Freeway.
It is expected that Panattoni might try to refurbish a handful of those buildings, most of which were built more than 40 years ago. The majority would be demolished, to make way for offices and new industrial space.
Environmental Issues
Some of the land Panattoni is set to buy could face some environmental issues, which might take a few years to resolve before construction could begin.
Those issues, and the need to demolish many of the buildings, are what kept the sales price relatively low, brokers said. Panattoni essentially was bidding on the land, not the buildings, brokers said.
Industrial brokers imagine that much of the development could be done on a build-to-suit basis, for specific tenants looking for operations in the area. But the slow leasing patterns for new office buildings in the county as of late suggests much of the construction may not happen for a few years.
The Anaheim area has a vacancy rate of about 7% for office space, and 4% for industrial space.
Big for Panattoni
The deal would catapult Panattoni into one of the few Southern California areas where it hasn’t been a big builder as of late.
The privately held company has developed an average of 12 million square feet of office, industrial and retail space annually during the past five years. It has a major presence in the Inland Empire.
Panattoni has built smaller office condominiums in the southern part of the county, but hasn’t had much of a presence around Anaheim in recent years, said Louis Tomaselli, senior vice president for the Orange office of Voit Commercial Brokerage LP.
Recent hires earlier this year showed the company was taking a more active interest in OC.
In May, Panattoni brought on Stephen Batcheller as a partner with responsibility for the company’s office and industrial activities in OC and the Inland Empire. Batcheller had long been one of the top industrial and office brokers in the area, having worked at CB Richard Ellis Group Inc. for more than 20 years.
“Steve knows the (Anaheim) market well. He has the knowledge to make this (project) work,” Tomaselli said.
In July, Panattoni brought on another area CB Richard Ellis veteran, Jon Marchiorlatti, as its senior development manager of the OC region. Marchiorlatti had spent the past 13 years with the brokerage company.
