The nation’s second largest food shipper is set to move its Santa Ana distribution center to Corona as part of a Southern California expansion.
Columbia, Md.-based U.S. Foodservice Inc., a unit of Netherlands-based Royal Ahold NV, has signed a $16 million, 15-year lease for 210,000 square feet at Corona Crossroads, sources said.
Corona Crossroads is a big industrial park under development by Laguna Niguel-based Birtcher Development LLC.
By spring, U.S. Foodservice is set to take most of a proposed 290,000-square-foot building under construction, the company said. It has the option to lease the entire building later.
The company plans to vacate its distribution hub at 601 W. Dyer Road in Santa Ana, according to broker Jeff Chiate, senior director with Cushman & Wakefield Inc.
The 187,000-square-foot building in Santa Ana was built in 1973. The company employs about 225 workers there.
U.S. Foodservice is expanding and wanted to move into a modern building, Chiate said.
When companies in OC need to expand to more than 200,000 square feet of industrial space, they often move inland to Riverside or San Bernardino counties, he said.
Brokers say there is more,and cheaper,industrial space in the Inland Empire than here. But they say Corona, as well as other popular cities such as Ontario, have far fewer large blocks of space available today then they did a few years ago.
“U.S. Foodservice distributes throughout Southern California, so there is nothing keeping them here in Orange County,” Chiate said.
Still, Corona is the first city commuters hit when leaving OC eastbound on the Riverside (91) Freeway past the Santa Ana Mountains. Many OC workers live in Corona, and some consider the city a kind of satellite of the county.
U.S. Foodservice is second to Houston-based Sysco Corp. in distribution of canned and dry foods, meats, frozen foods, dairy products and seafood. The company has about 100 distribution centers in the U.S. It routes food to restaurants, hotels, schools and hospitals, among others.
As for the aging building at 601 Dyer, the private owner of the space is looking to lease it out, sources said.
Birtcher Development has been building Corona Crossroads in phases since it bought the land in 2002.
Several buildings there have been sold to manufacturing companies that moved from Orange or Los Angeles counties, according to Shannon Hondl, vice president of development with Birtcher.
The entire complex is set to total 815,000 square feet when finished, he said.
The deal by U.S. Foodservice follows an announcement in May by Kraft Foods Inc. that it plans to halt production of Honey Maid Graham Crackers, Ritz Crackers and Wheat Thins at its Buena Park plant by year’s end.
Irvine-based developer Centra Realty Corp. is in talks to buy the site from Northfield, Ill.-based Kraft, according to Centra principal Keith Ross. Escrow is expected to close this month, he said.
The city is rezoning the Kraft complex to allow for shops and possibly an auto dealership, according to May Hui, the city’s economic development director.
Demolition work could begin as early as spring, according to Centra. Kraft is set to lease back the plant until March.
