Behr Process Corp., a Santa Ana-based manufacturer and supplier of architectural paint and exterior wood care products that’s one of the largest employers in its hometown, is planning a big expansion of local operations.
The company recently inked a lease for nearly 230,000 square feet of office space on St. Andrews Place in Santa Ana, the largest office deal reported to be struck in Orange County so far this year.
The move to 1801 E. St. Andrews Place is to accommodate accretive growth, according to real estate sources familiar with the deal.
Behr will consolidate office employees from other Santa Ana locations, and perhaps some out-of-town locations, at the new facility. The move will free up more space for manufacturing and other uses at its existing area properties and allow for the company to add more local jobs, sources said.
The St. Andrews Place location could hold in excess of 700 employees, sources tell the Business Journal. Behr is currently estimated to employ more than 1,000 people in the area.
It already occupies nearly 700,000 square feet of space in Santa Ana, both as an owner-user and as a tenant, according to CoStar Group Inc. records.
Its largest facility is a nearly 300,000-square-foot industrial building on South Standard Avenue that it leases and uses for manufacturing.
It also owns a pair of buildings on West Segerstrom Avenue, including its headquarters facility.
Powerwave Site
The new office is just west of the Costa Mesa (55) Freeway, about a block from Edinger Avenue.
It was previously owned and occupied by Powerwave Technologies Inc., a now-defunct telecom equipment maker. The space Behr will take over has been empty for a few years.
Powerwave sold the building to an affiliate of New York-based private equity company Angelo Gordon & Co. in late 2011 in an effort to raise cash for operations.
The $49.6 million deal included a long-term leaseback for Powerwave, but that part of the deal went south in 2013 after the tenant filed for bankruptcy, leading to litigation pertaining to the property that kept the empty space off the market for a while.
The space Behr is taking over was the most available of any existing office building in OC that’s currently open and available for immediate lease, according to CoStar records.
The entire property runs 367,045 square feet; an affiliate of Deutsche Bank occupies the remainder of the building, according to CoStar records.
Behr was represented in the latest lease by Kevin Turner and John Gallivan, brokers with the Irvine office of Cushman & Wakefield Inc.
Angelo Gordon was represented by CBRE Group Inc.’s David Dowd.
Irvine’s Pendulum Property Partners has been acting as asset manager for the landlord, while the local office of Lincoln Property Co. serves as property manager for the building.
The new lease runs for 15 years, according to real estate sources.
H. Hendy Associates is handling design for the space, while DPR Construction will be the general contractor for the build-out, sources tell the Business Journal.
Behr officials could not be reached for comment last week on the new lease.
Home Depot Ties
The building is next to a Home Depot store on Edinger Avenue. The two companies already share close ties. Behr’s products—a mix of paints, decorative finishes, primers, stains and surface preparation products—are primarily sold at Home Depot stores and on the company’s own website, and are marketed to do-it-yourself customers and professional contractors.
Behr, formed in 1947, was sold in 1999 to Taylor, Mich.-based Masco Corp., which owns a variety of home improvement brands and has a market value of about $12 billion.
Last year, Masco’s net sales to The Home Depot were $2.5 billion, about 34% of the company’s consolidated net sales, according to regulatory filings.
Behr said that it has been named “Partner of the Year” by The Home Depot 10 times.
In addition to Behr, other affiliates of Masco operate out of the company’s Santa Ana facilities and will be moving as part of the new lease, according to sources.
