Medtronic’s Anaheim Facility Sells for $7 Million
Orange County’s nonresidential building activity continued its anticipated slowdown, according to the latest report by The McGraw-Hill Cos.
September contracts for future construction totaled $189.2 million, a 51% decline from the $386.9 million awarded in September 1999. Nonresidential activity was wholly responsible for the decline, as only $50.4 million worth of contracts were awarded in Orange County during September, an 81% decline from the year-ago level. Residential contracts totaled $138.8 million, up 13%, according to the McGraw-Hill report.
Year-to-date activity is off 21%, as the total value of Orange County contracts awarded through September stands at $2.48 billion as compared with the $3.13 billion awarded during the first nine months of 1999.
As with September activity, nonresidential construction accounts for most of the slowdown. A total of $977.7 million worth of work has been awarded so far this year, off 36% from the $1.53 billion recorded during the first nine months of last year. Residential construction contracts totaled $1.50 billion through September, off a more modest 6% from the $1.60 billion recorded during the similar 1999 period.
On a national level, developers and builders are expected to keep the industry’s nine-year expansion going, but at a slower rate.
Robert Murray, vice president of economic affairs for the Construction Information Group of The McGraw-Hill Cos., expects a slowdown from the expected 3% increase in activity this year, to $462 billion.
“Although we will see a slower, more controlled growth pattern in 2001, I believe the immediate years ahead for the construction industry will continue to be healthy ones,” said Murray, speaking at F.W. Dodge’s Outlook 2001 Executive Conference in Washington, D.C. “We are not currently facing the imbalances that have been present in the latter stages of prior expansions. That is definitely a reason to be optimistic.”
The Federal Reserve Bank’s six interest-rate increases in recent quarters, coupled with more restrictive bank lending standards, will continue to slow the economy, leading to the sought-after “soft landing” Fed Chief Alan Greenspan has talked about. Murray predicts the economy will grow at a 3.5% annual rate next year.
“The construction industry witnessed remarkably steady growth during the 1992-99 period, reaching new highs in both current- and constant-dollar terms,” Murray said. “The strength was present across the major industry sectors,single-family housing, public works, income properties and institutional building,as only manufacturing building stalled over the past few years.
“But no expansion goes on forever, and higher interest rates have begun to have some restraining impact this year, and that trend should continue into 2001,” he added.
COMMERCIAL
Asset Management Consultants Inc. has purchased a two-story office building in Costa Mesa for $7.57 million from West Airport Center LP.
The building, at 125 E. Baker St., is adjacent to the Baker Street off-ramp of the Costa Mesa (55) Freeway.
James Hopper, president of Asset Management Consultants, said his firm was attracted to the property partly because of its location in the business district of Orange County. The building is 90% occupied.
Year-to-date, Asset Management Consultants has acquired more than $30 million of real estate in Southern California.
The father-son team of George and Steve Economos of Capital Commercial’s Newport Beach office represented both the buyer and seller.
Medtronic Sells Facilities
Monterey-based New Cities Development has acquired 11.1 acres of land in Anaheim for $7 million from Medtronic Inc.
The property, at 4633 E. La Palma Ave., has three buildings totaling 97,200 square feet of space formerly used for medical purposes. Minneapolis-based Medtronic is a medical device manufacturer.
New Cities Development “plans on either significantly renovating the facilities or tearing them down for new construction,” said Rob Socci, who along with Jack Farris of Voit Commercial Brokerage’s Anaheim Metro office and Alan Pekarcik of the firm’s Irvine office represented Medtronic. “Either way, New Cities will add new development to the land.”
New Cities was represented by Cushman & Wakefield.
RESIDENTIAL
Riverside-based Van Daele Development has purchased 133 single-family lots in the La Sierra neighborhood of Riverside for an undisclosed price from Griffin Communities.
The 8,000-square-foot to 11,600-square-foot lots offer views of the surrounding hills and valley and are near the Riverside (91) Freeway.
Van Daele Development and Griffin Communities were both represented by Mac O’Donnell, Mike Hunter and Paul Grover of Costa Mesa-based O’Donnell/Atkins Co.
Two Apartment Deals
Morgan Skenderian Investment Real Estate Group has brokered two recent apartment deals.
Los Angeles-based W-Warner Garden LLC has purchased the 56-unit Warner Gardens Apartment complex at 8202 Warner Ave. in Huntington Beach for $5.7 million from the Sun Trust of Huntington Beach.
Grant Hahn of Morgan Skenderian’s Newport Beach office represented the trust while Ken Morgan and Jay Skenderian represented W-Warner Garden.
Orange-based FDK Enterprises LLC has purchased the 104-unit Bascom Square Apartments at 222 N. Muller Ave. in Anaheim for $7.8 million from Irvine-based 222 N. Muller Apartments LLC. Morgan and Skenderian represented both parties.
