Defense and aerospace giant Boeing Co. has quietly sold a nearly 56-acre property it owns and occupies in Huntington Beach, with the land expected to make way for a new multi-building industrial development, the Business Journal has learned.
Property records indicate that Irvine-based developer Sares-Regis Group paid about $113 million for the land along Bolsa Ave. at the end of March. It appears to be the largest commercial property sale of the year in Orange County to date by sales price.
The site currently holds a roughly 923,000 square-foot collection of connected office buildings and other Boeing facilities, and also contains a large amount of surface parking.
Boeing (NYSE: BA), which has been shedding jobs at its sprawling Surf City campus over the past few years, intends to lease back portions of the campus for two years, according to real estate sources familiar with the transaction.
After Boeing vacates the low-rise buildings, they are expected to be razed to make way for a collection of new industrial properties by Sares-Regis.
The site would appear large enough to comfortably hold nearly 1 million square feet of new warehouse and distribution space.
It’s a familiar playbook for privately held Sares-Regis, one of the region’s largest industrial developers. It has conducted a number of similar transactions with Boeing in Huntington Beach and near the Long Beach Airport over the past decade.
Sares-Regis currently has plans in store to build more than 600,000 square feet of new industrial space on a site to the immediate west of the just-bought land on Bolsa Ave. The three-building project is the largest new industrial project currently on the books in the county.
That site—whose most prominent building is an eight-story, 285,000-square-foot office that is being knocked down to make way for the new development—was also sold by Boeing.
The Business Journal was first to report on the expected sale of that roughly 30-acre property last year; it’s located at the intersection of Bolsa Chica Street and Bolsa Avenue and traded for nearly $72.8 million, property records indicate.
Early-stage demolition work currently is underway on that property. Sares-Regis officials told the Business Journal that they expect the three new industrial buildings to be complete in the first quarter of next year.
The latest deal puts the developer’s Surf City land buys from Boeing at about $186 million over the past year.
Both last year’s sale and the just-completed deal were bought by affiliates of Sares Regis operating under the Huntington Gateway Industrial LLC name, property records show. Its financial partner in the two deals hasn’t been disclosed; records indicate the buyers took out a $62.5 million loan with Wells Fargo to finance the deal.
Officials with Sares-Regis—the company behind the ongoing redevelopment of Toyota’s former sprawling campus in Torrance, which runs 110 acres—confirmed the latest purchase but declined to elaborate on their plans for the new site.
The deal was brokered by Jeff Read, with Newmark Knight Frank.
Read, an executive managing director with the Newport Beach office of the commercial brokerage, declined to comment, and officials with Boeing could not be reached for comment.
The latest sale marks the latest sign of retrenchment for Boeing in Huntington Beach, where it has long been one of the city’s main employers.
In 2016, Boeing announced it would move about 2,400 jobs out of its Huntington Beach facilities over a four-year period, cutting local employment nearly in half.
Plans for the portions of the campus that have been sold to Sares-Regis should partially offset those job losses.
According to a recent report by the Huntington Beach’s city manager, the three-building development project now underway, called Huntington Gateway, is projected to create 500 construction jobs and 1,300 operations jobs in the city.
The project consists of three buildings, each divisible for up to 10 tenant spaces ranging in size from 25,000 square feet to 100,000 square feet, according to the report.
Deal making between the aerospace firm and the developer has been brisk over the past decade.
In 2012, Boeing sold part of its massive Long Beach facility near that city’s airport to the developer; it’s now called Douglas Park, and has seen a variety of industrial, office and retail developments.
Chicago-based Boeing currently is planning to sell another 90-acre facility it owns next to the Long Beach Airport; a buyer hasn’t been announced yet.