Wood Seller Moving to Garden Grove, Verizon Grabs Space
Timber Mountain Hardwoods Inc. is as wired as a wood supplier can be, using technology to expedite its business and keep costs low, according to Chris Dennis, the company’s managing partner. But that’s not enough to justify a pricey Irvine address.
The company is in the midst of doubling its space from just less than 40,000 square feet to 80,000 square feet. To do so, it’s moving from Irvine to Garden Grove next month. In the past 18 months, Timber Mountain’s old neighborhood on Daimler Street in Irvine has gone from light industrial to a hub for software and data companies.
“Rents have skyrocketed,” Dennis said. “Our move to Garden Grove was definitely due to the increase in rents in the area.”
With the booming economy and tight real estate market, Timber Mountain is following in the footsteps of other, old economy companies. Recently, 20-year Irvine Spectrum resident Don De Cristo Concrete Accessories Inc. doubled in size to 100,000 square feet,for the same price,by moving to Westminster.
“For what we do, Irvine is becoming too expensive,” said Vasken Kassarjian, vice president of Don De Cristo.
Timber Mountain is leaving the remainder of a five-year lease on Daimler Street to move into a building on Western and Lampson avenues. The value of the new lease, $2.25 million over five years with a five-year option, is only slightly higher than the one in Irvine, Dennis said. Timber Mountain is spending $350,000 on improvements, including the construction of new office space in the industrial building.
The remainder of Timber Mountain’s Irvine lease was being marketed for sublease when Verizon Wireless stepped up and signed a new two-year lease with a two-year option. It moved out of a 25,000-square-foot space on nearby Murphy, according to brokers, in a modest expansion to warehouse some wireless tower servicing equipment.
Timber Mountain is growing fast and the new space may only last as long as the old building,about two years,Dennis said.
“We’ll be looking to lease extra warehouse space in the same area,” he said. “And we’ll be adding distribution space.”
The company employs 20 warehouse, distribution, and material handling workers as well as forklift and truck operators and plans to double the workforce in the next year or so, Dennis said.
“When you look at our workforce from a compensation perspective it’s the higher compensation employee,” he said. “We have no low-wage employment.”
The lowest paid employee would be a forklift driver who, with salary, bonus and profit sharing, would earn $40,000 per year, Dennis said.
Timber Mountain buys hardwood,oak, maple and cherry,in bulk from East Coast sawmills and sells to furniture makers who supply restaurants and hotels or retail stores. Homebuilders such as John Laing, Shea and Standard Pacific also are customers. So are kitchen cabinet and shutter makers who sell via builder design centers or in-house retail networks.
Currently, Timber Mountain stores hardwood in rented off-site facilities before it’s sold.
Furniture is the biggest piece of the company’s business. There are 80 to 100 hardwood wholesalers from Tijuana to Santa Barbara operating in a $1 billion a year market, according to Dennis. He expects to sell $30 to $35 million this year, the company’s second full year of operation.
“That puts us in the top 50% of the local market already,” Dennis said. “There’s a strong possibility it would put us in the top 25%.”
The five-year plan is to hit $100 million in annual sales, he said.
“The industry we’re in has typically (taken) a mom-and-pop approach,” Dennis said. “We’ve tackled it from the quality and service aspect, using information technology to lower the cost.”
Timber Mountain is using new information systems, bar coding and, in the future, the Web to change how customers buy hardwood.
“It’s stuff that happened in other industries 10 years ago,” he said.
Dennis and partner Kevin Trussell were regional operators for Canada-based national wood wholesaler Hardwoods Inc. before launching Timber Mountain.
“Ours is one of those industries that doesn’t come up in conversation a lot,” Dennis said. “But the financial impact to Southern California is tremendous.”
Two of Timber Mountain’s largest customers, Boyd Furniture Manufacturing in Pomona and The Orman Grubb Co. in Anaheim, employ 1,500 people each, Dennis says. A third client has a plant in Pomona and another in Mexico.
“A couple of years ago Boyd leased and refurbished an old abandoned General Dynamics plant in Pomona and turned it into a 1 million square foot furniture plant,” he said.
Timber Mountain’s new lease began in November and it has already moved its inventory to Garden Grove, Dennis said. The Verizon lease of Timber Mountain’s old site begins December 1.
Steve Schloemer and Mike Hartel of Colliers-Seeley represented Timber Mountain in its transactions; Bob O’Neill of Grubb & Ellis represented Verizon in the new lease on Daimler. n
