Amazon.com Inc. has made its largest reported real estate buy in Orange County, paying $165 million for a sprawling 30-acre office site in Brea that’s long served as call center for Bank of America, the Business Journal has learned.
The e-commerce giant, valued at $1.7 trillion, is exploring turning the site, now holding nearly 640,000 square feet of office space, into a distribution center, sources tell the Business Journal.
No plans or timeframe for the industrial project have been disclosed to date, though a late 2022 start for a project appears to be the earliest a redevelopment could start.
Bank of America said last month it would be terminating its lease for the campus at 275 Valencia Ave. next summer.
The bank’s lease was scheduled to run about another year beyond that, but its employees there have largely been working remotely since the start of the pandemic.
30+ Year Tenant
The Valencia Avenue facility is located north of Imperial Boulevard, close to other industrial properties near the La Floresta mixed-use development.
The campus was said to be the largest leased, single-user office building in OC, according to brokerage data from a few years ago. It’s designed as a headquarters with executive offices, an administration area and call center space.
Bank of America has occupied the building since it was built more than 30 years ago.
The bank had employed about 3,000 people in Brea prior to the pandemic and as of a few years ago was the largest employer in the city.
Conversion Trend
Amazon bought the building from a venture between Irvine-based real estate investor and developer Greenlaw Partners and New York-based investment firm Cerberus Capital Management LP. Amazon paid about $260 per square foot for the offices, or $5.5 million an acre.
Greenlaw and Cerberus paid a reported $110 million for the site in 2014.
The deal, completed last month, is the priciest single-property office sale reported in OC this year.
Assuming Amazon goes ahead with an industrial redevelopment of the office site, it will continue an emerging trend seen often in OC this year.
Industrial developers have increasingly been paying top dollar for older area office buildings in OC, including prominent office campuses in Lake Forest, Orange, Huntington Beach and Santa Ana, with an eye of converting them into new, last-mile distribution sites.
Buying Spree
Amazon’s real estate purchases in OC since mid-2020 are now approaching $400 million following the Brea acquisition, according to Business Journal data.
Prior to the Brea purchase, its most expensive acquisition in OC was about a year ago, when it paid $112 million for a 31-acre site in Irvine formerly belonging to the motion and control division of aerospace firm Parker-Hannifin.
A new distribution facility is in the cards for the Irvine site.
Another distribution hub in Irvine that Amazon leases but does not own, close to John Wayne Airport, sold this June for almost $181 million, the most expensive industrial deal of the year in OC.
The e-commerce giant has been on a buying and leasing spree over the past three years that’s expected to eventually add over 3 million square feet of industrial space to its local portfolio when several new projects in the works are completed.
At the start of 2019, it occupied less than half a million square feet of industrial space in OC, and largely served OC via its Inland Empire facilities, which total more than 15 million square feet.
In addition to facilities it owns, Amazon has inked large leases at new and updated properties in Mission Viejo, Santa Ana, Cypress and Anaheim.
For a rundown of large real estate sales involving Amazon in OC over the past year, see page 38. The top six reported deals involving the company over that time total nearly $675 million, according to Business Journal research.
BofA Redux
The Bank of America deal is the second of its type in recent weeks for Greenlaw Partners, which continues to reap the benefits of working with Amazon, both in and out of Orange County.
The firm, among OC’s most active investors in the office and industrial markets over the past decade, last month sold a new distribution facility in Simi Valley that it developed for the ecommerce giant.
It traded for $128 million, in one of the larger commercial real estate deals seen in the San Fernando Valley area this year.
The industrial building’s nearly $441 per-square-foot price is on par with many high-end office buildings in Orange County. The 290,220-square-foot single-tenant industrial site is at 400 National Way, north of the Ronald Reagan (118) Freeway, and a few miles from Reagan’s presidential library.
The 44-acre site was last used as a call center for Bank of America; Greenlaw got the property entitled for Amazon’s uses last year.
The name of the buyer, said to be a private family office investment company, wasn’t disclosed.
Greenlaw has other Amazon projects in the works.
In the San Gabriel Valley city of West Covina, the developer last month got city approval to redevelop a 21-acre church property into an Amazon distribution center. It hasn’t closed on the land yet, though.
Greenlaw expects to complete the 177,240-square-foot center, a few blocks north of the San Fernando (10) Freeway, in about a year if it buys the land, according to local reports.
In Orange County, the developer is seeking approvals for a new Amazon facility in San Clemente industrial park, and worked to get the e-commerce firm as a tenant for a portion of the former Mitsubishi Motors America campus in Cypress. Duke Realty is now heading that project.
