Aerospace may be resurging, but it can’t eclipse the demand for prime commercial real estate.
Boeing Co.’s excess land in Huntington Beach has proven ripe for redevelopment, with companies quickly snatching up buildings that have risen there.
Among recent takers: a golf club maker and a producer of sheet metal for building homes.
Now longtime Surf City developer Brian Burke plans to add another 442,000 square feet of space to the mix. That’s on top of finishing an 80,000-square-foot building for Morgan Sheet Metal Inc. this month.
Burke said he’s already got a taker for a big chunk of the proposed space. An undisclosed company has leased a planned 185,000-square-foot building that should begin construction this month, he said.
Initially, Burke said he planned to divide the building at 14520 Delta Lane into five pieces and lease them separately.
The tenant is related to the construction industry and is relocating from elsewhere in the county, according to Bob Goodmanson, a broker for CB Richard Ellis Group Inc., who is marketing Burke’s buildings with partner Brian DeRevere.
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Rendering of proposed building: going for $130 to $170 per square foot |
Goodmanson also declined to name the company because of a confidentiality pact.
Burke heads Santa Ana-based Burke Real Estate Group, which has been active in Huntington Beach for decades. He took over management of the development company from his father.
His main project these days is Astronautics Corporate Center, a 258,000-square-foot industrial and office park at Rancho Road and Astronautics Lane. It’s next to the 185,000-square-foot building Burke leased on Delta Lane.
The park should include five industrial buildings ranging from 18,000 to 62,000 square feet and one office building of 40,000 square feet. Sale prices for the space range from $130 to $170 per square foot, which is nearly comparable to popular South County areas such as the Irvine Spectrum, Mission Viejo and Aliso Viejo.
Burke’s buildings are larger than those that make up the hot market for small buildings for sale. Those buildings typically are 10,000 square feet or less.
“Bigger users usually lease, but with interest rates so low they are buying,” Burke said.
Timothy Joyce, a senior vice president with Grubb & Ellis Co., said Burke should have little trouble finding buyers,even at the top market prices he is charging.
Demand is strong and space is limited in West Orange County, Joyce said.
Huntington Beach’s industrial vacancy rate is 3%, which beats the county’s 3.9% rate, itself one of the lowest in the nation, according to Voit Commercial Brokerage LP. West County’s rate also is low at 3.6%.
The office market is a little looser in Huntington Beach at 11%, versus the county’s 9%.
Burke said he is in escrow on a 40,000-square-foot building and has a sale pending on a 54,000-square-foot one. He declined to name the buyers.
His buildings are part of the much larger McDonnell Centre Business Park, which includes manufacturing, distribution and office space at the northern tip of Huntington Beach. The center is one of several big swaths of surplus land being redeveloped by Boeing in Southern California and the only one in OC.
McDonnell Centre has attracted a mix of companies, from Japan’s Sharp Corp. to Dynamic Cooking Systems Inc., part of New Zealand’s Fisher & Paykel Appliance Holdings Ltd.
Boeing has been developing its Huntington Beach land in phases for several years. The company’s Boeing Realty Corp., which plans out surplus land and gets zoning for it before selling, is based in Irvine.
The center is popular with companies for a variety of reasons, brokers said.
Some owners live near the beach and want their companies close by. Some larger companies like the site’s proximity to the San Diego (I-405) and Garden Grove (22) freeways. And some companies want to be in OC but close to the ports of Long Beach and Los Angeles.
Other developers have been active in Surf City.
Irvine’s Centra Realty Corp. last year finished construction on a 130,000-square-foot headquarters and plant for Roger Cleveland Golf, a unit of France’s Skis Rossignol SA. The maker of skis is being acquired by Quiksilver Inc., based a couple blocks away in Huntington Beach.
