Irvine-based The Colton Co. has purchased a 211,000-square-foot design and office center in Laguna Niguel from Koll Bren Schreiber Realty Advisors for $21.5 million.
The Laguna Design Center, along Aliso Creek Road and Alicia Parkway, includes more than 40 showrooms to exhibit some 1,800 different product lines used by professional interior designers.
The center, which was built in 1983, was put on the market by KBS for $24 million.
“Colton got quite a deal on it,” said Bob Griffith, senior director of Cushman & Wakefield in Irvine. “The final price came out about $100 a square foot, which was a very good price for that area.”
Most of the nearby low-rise office space is selling for $150 to $175 a square foot, he added. “So obviously, they (Colton) bought it way below replacement costs,” said Griffith.
The design center, which is 100% occupied, includes about 25% office space with the rest reserved for showrooms.
“They have a strong mix of tenants,” said Griffith. “In addition to the real estate, Colton is also buying a good existing business with a strong client base.”
For company president Linda Colton, the opportunity to buy the design center was too good to pass up.
“I have a background in design,” said the former art-history major at USC who has dabbled in the field ever since. “I’ve been purchasing product from there for years. When it became available, the opportunity seemed like a natural fit.”
The center, which was originally developed by Birtcher Real Estate Group, had been owned for the past several years by a company not familiar with the interior design industry, said Colton.
KBS, a Newport Beach-based investment fund adviser, sold the property as part of a predetermined exit strategy for a larger portfolio.
“It has been doing well, but I think it will help to be under an ownership that knows how a designer operates in the field,” said Colton.
The design center is one of 15 in the country. It specializes in products not available on the retail level to consumers.
“This is a place where you have to be a licensed design professional to purchase products,” said Colton. “It has everything from fabric and furnishings to lighting products and kitchen cabinets.”
The closest similar type of business, the Pacific Design Center, is in Los Angeles. Other design centers, which are independently owned and managed, are in San Francisco and Seattle.
“The one in Orange County serves the entire Southwest,” said Colton. “Design professionals from San Diego, the Inland Empire, Las Vegas and New Mexico come here to shop.”
The Orange County design center, she added, is also drawing business from design professionals around Los Angeles.
“With homebuilding booming in this market, we’re attracting a high-end product to our showrooms,” said Colton. “That has helped to create a whole different market than the one Pacific Design Center serves.”
And one that continues to grow, according to local designers.
“The Laguna Design Center is a great, evolving resource for professional interior designers,” said Wes Hageman, a Laguna Beach-based designer. n
