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Tuesday, May 28, 2024

Opus Planning Big Anaheim Industrial Project

The Irvine office of Phoenix-based Opus West Corp. is considering building three large warehouses in a move that would mark the first development geared to big industrial tenants in Orange County since the start of the decade.

The $60 million project, called the Anaheim Freeway Technology Park, would total more than 420,000 square feet.

The Anaheim site is a former automobile battery plant at 1201 Magnolia Ave. It’s near the intersection of the San Diego (I-5) and Riverside (91) freeways.

Opus West is in talks to buy the land from auto parts supplier Delphi Corp., which is in bankruptcy reorganization.

A completion date for the deal hasn’t been set. The closing depends on the bankruptcy court handling the Delphi land sale, according to Paul Marshall, vice president for Opus West in Irvine.

Troy, Mich.-based Delphi is the largest of several auto parts suppliers to file for bankruptcy in the past year.

The Anaheim Freeway Technology Park would be smaller than the massive distri-bution centers being built in the Inland Empire.

But it still would be a big deal for OC, where developers largely have shied away from single-tenant buildings of 100,000 square feet or more because of land costs.

Early plans being marketed by CB Richard Ellis Group Inc. call for one 195,000-square-foot warehouse with 30-foot clearances and 5,750 square feet of office space. The other buildings would be 123,950 square feet and 104,800 square feet.

Most industrial developers in OC have been building smaller, for-sale “industrial condo” units in the 20,000-square-foot range or less.

Land for industrial property in North County typically goes for about $30 to $35 per square foot, according to Chris Migliori, executive vice president of commercial brokerage firm GVA Daum.

“It’s hard to build anything affordable,” he said. “The only way to make it profitable is to build smaller buildings. You generally can’t build big-bomber (units),the rent can’t support the land prices.”

Because Opus West is pursuing the land through bankruptcy court, the company could get a better deal. That could make the development of larger buildings more viable, sources said.

The Delphi lot is being sold for about $25 per square foot, sources said.

The three buildings would hold a tenant each. Opus West would sell or lease the facilities.

The largest building is listed for $27 million, or $138.50 per square foot. The other buildings are listed at $139.50 per square foot each,$17.3 million and $14.6 million, respectively.

Monthly rents likely would run 67 cents to 69 cents per square foot if the buildings are leased.

Those lease rates are higher than the region’s average.

The average lease rate for manufacturing and warehouse space in North and Central OC was 47 cents per square foot in the third quarter, according to CB Richard Ellis. Rents likely rose by a penny or two per square foot in the fourth quarter.

Rents in the Inland Empire typically are about 30 cents per square foot, said James Camp, senior vice president at Voit Development Co.

Opus West has done industrial developments across the country. In OC, the company has focused on condominiums and office buildings of late.

The company is under way with its Plaza-Irvine high-rise condo tower along Jamboree Road, which is being developed with Scottsdale-based Geoffrey H. Edmunds & Associates Inc.

Also on the plate are plans for a 13-story, 300,000-square-foot office building called Opus Center Irvine III.

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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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