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Sunday, May 28, 2023

Burnham Warms to Industrial Again With Orange Buy

Newport Beach’s Burnham USA Equities has shied away from industrial development in recent years, turning its attention instead to retail and office projects.

Now Burnham’s $11 million buy of the Batavia Business Park near Angel Stadium of Anaheim signals a renewed interest in industrial, said Stephen Thorp, Burnham vice president.

The business park, north of Katella Avenue on Batavia Street in Orange, has five buildings ranging from 14,000 to 28,500 square feet.

Robert Stone and John Finklestone sold the park. Steve O’Hara of Mission Viejo’s O’Hara Financial Services worked on the sale.

Batavia Business Park is full. Vacancy rates for industrial space in Orange is 1% and about 3.6% countywide, according to the most recent data from CB Richard Ellis Group Inc.

Burnham said it is buying the park to diversify. The company is considering buying other industrial buildings in the area, according to Thorp.

Apartments going up in Anaheim: county rents projected to slip 0.2% through 2007

Retail still is strong for Burnham.

The company is about to break ground on 20,000 square feet at the Shops at Stadium Towers, next to Equity Office Properties Trust’s 12-story Stadium Towers Plaza. The company said it has leases signed with several retailers and eateries as well as Comerica Bank.

Storage Part of Barker Buy

Two local self-storage facilities were part of a 1.2 million-square-foot national portfolio that changed hands this month when Los Angeles-based developer Barker Pacific Group bought Union Development Co., a 110-year-old developer based in Cerritos.

Barker Pacific and investment management partner Angelo, Gordon & Co. of New York paid an estimated $100 million for Union Development, which focuses on building retail centers, apartments, office buildings and industrial parks, in addition to storage facilities.

The 69,442-square-foot Extra Storage Irvine and the 85,425-square-foot Extra Storage Placentia made up about 13% of the portfolio bought by Barker Pacific, a national developer behind the Fine Arts Building and 626 Wilshire Blvd., both in Los Angeles.

The deal could bring redevelopment of some of the older Union Development properties, Barker Pacific managing director Michael Barker said.

The national apartment market is strong, as vacancy rates continue to drop. But Orange County got no love in a recent report from the Center for Real Estate Studies, a Palos Verdes-based nonprofit.

Among 37 major metropolitan areas, OC was one of only four areas where rents are expected to decrease for the two years through Sept. 30, 2007.

That’s good news for renters, of course. But it’s not so hot for owners looking to sell their apartment complexes.

Things could be worse: The 0.2% rent decrease projected for OC is slightly better than the 0.4% slip expected for Los Angeles, according to the study.

The best market for apartment investing is Charlotte, N.C., which could see a 3.5% rent increase in the two-year period.

With a median sale price of $41,900 per apartment, Charlotte is far behind OC’s $121,800 per apartment average.

San Francisco still holds the honor for having the most expensive apartments in the country. They sell for a median price of $182,000.

The prediction of declining rents could surprise some locals, who have seen rents rise about 7% in the past year to an average of $1,365, according to the latest figures from Pierce-Eislen, a Phoenix-based real estate market researcher.

OC has 13 apartment complexes with at least 50 units under construction, with another 15 properties in the planning stages, Pierce-Eislen said.

Lyon Honored

William Lyon, the 83-year-old chief executive of Newport Beach’s William Lyon Homes Inc., won an Ernst & Young

Entrepreneur Of The Year award in November.

Lyon,not your typical entrepreneur after 50 years in homebuilding,received the honor for his decades of work. He won for the real estate, hospitality and construction group.

In 1954, Lyon started Fullerton’s Luxury Homes with his brother. He sold the company to American Standard Cos. in 1968 and started William Lyon Co. in Newport Beach a few years later.

Like other builders, Lyon hit on hard times in the 1990s recession. For the past few years, he’s ridden the housing boom to record sales and profits at William Lyon Homes.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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