Pacific Industrial Comes to OC; Granite Buys Fullerton Complex
COMMERCIAL
A project in Anaheim that has received a lot of press over the past several years quietly reached a new high-water mark recently with the completion of the four-story Stadium Crossings office building.
The structure, with 104,526 square feet of rentable space, is owned by Newport Beach-based Crown Realty and Investments as well as Hillwood Development of Dallas. Hillwood, which has an office in San Clemente, is wholly owned by Ross Perot Jr.
“We had very strong leasing activity on the office building,” said Robert Flaxman, president and CEO of Crown Realty. “It was the right size of a project for that location.”
At State College Boulevard and Katella Avenue in Anaheim, the office building is across from Edison Field and near Disneyland.
“The entire building was preleased before it was completed,” said Flaxman.
Major tenants include Hewlett Packard, which is moving its regional office from Fullerton to occupy a portion of the second floor and the entire third and fourth floors, about 60,000 square feet. The 10-year lease signed by Hewlett Packard is valued at more than $16 million.
Also moving into the new Stadium Crossings is CB Richard Ellis, which will take 26,000 square feet and the whole ground floor. Willdan Engineering is also a major tenant in the new building, occupying a portion of the second floor.
The Stadium Crossings offices are part of a 12-acre development. A new 140-room Marriott Town Suite Hotel opened this month at the site. The Spectrum Health Club is scheduled to be ready for business next month and a Denny’s restaurant is planned to open in the spring.
Already built are a Starbucks Coffee house, a Carl’s Jr. and a Community Bank office. Other restaurants are also planned for the development.
Flaxman says his company continues to look for more development opportunities in the Orange County area.
“We’re looking at several other projects,” he said.
Rick Warner and Mark Friend of CB Richard Ellis brokered the lease deals for Stadium Crossings.
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For the past 12 years, Pacific Industrial Partners has been taking its time, slowly assembling a commercial and industrial portfolio of more than 5 million square feet as well as 3,000 apartment units.
The Encino-based investment real estate firm has shied away on most of its deals from bringing in outside partners. And, according to Robert Neal, one of three PIP principals, that’s just the way they intend to continue operating.
“It has given us a certain amount of flexibility to acquire riskier properties that other investors typically wouldn’t be interested in,” he said.
Until recently, PIP has been concentrating its activities in the greater Los Angeles County market. Now, it is looking more closely at the Orange County market. As a result, PIP has opened an office in Newport Beach and is working on several deals in the area, targeting properties in the $3 million-to-$15 million range.
“We’ve done larger deals,” said Neal. “But since we aren’t developers and we use our own equity without any help from outside partners, that’s the range where our comfort level usually falls.”
Joining Neal as principals in the firm are David Hager and Adam Milstein.
The firm prefers to buy older industrial and office properties in need of renovation. “We’ve been fortunate to find acquisition and management deals that have turned into profitable investment opportunities,” said Neal. “We’ve acquired maybe seven or eight properties in Orange County in the past, and it is now becoming even more of a major focus for us.”
PIP has been averaging around 1 million square feet of acquisitions in each of its LA submarkets, according to Neal. “That’s what we’d like to get up to in Orange County,” he said.
RESIDENTIAL
Granite Fullerton LLC of Irvine has purchased a 94-unit apartment complex in Fullerton for $6.85 million. The Orangefair Village Apartments, at 400 W. Baker Ave., formerly was owned by Tony and Mary Belland of Whittier.
“They purchased the building in the ’70s and wanted to move on to other investments,” said Jay Skenderian, a partner in Morgan Skenderian Investment Real Estate Group that brokered the deal.
Granite Fullerton LLC is a private investment group that deals solely in apartment purchases, he added.
“They own units all over Southern California and Colorado,” said Skenderian.
Orangefair Village consists of two- and three-bedroom units.
“The buyers plan on spending about $650,000 on renovations,” said Skenderian. “But it’s a good location in Fullerton off Harbor Boulevard and Orangethrope (Avenue) just north of the 91 Freeway.”
Currently, units are renting for $775 to $925 a month.
“The new owners want to clean it up and raise rents about $200 (per month) a unit,” said Skenderian. “All of the other complexes in the area are renting for much more and are in much better condition.”
