An Anaheim office built for CKE Restaurants Holdings Inc.—parent company of one of Orange County’s iconic businesses, burger chain Carl’s Jr.—has been bought by a healthcare provider, marking an end to CKE’s corporate ties in the area.
Los Angeles-based AltaMed Health Services, which bills itself as Southern California’s leading nonprofit healthcare system, closed this month on the purchase of 1325 N. Anaheim Blvd., a 90,533-square-foot building next to the Riverside (91) Freeway and Harbor Boulevard.
The three-story building was built in 2008 and is among the four largest offices to open in the city over the past decade, according to CoStar Group Inc. records.
AltaMed paid just over $29.8 million for the offices, property records indicate. That’s nearly 50% more than what prior owner, Corona-based North Anaheim Office LP, reportedly paid for it in 2010.
AltaMed is expected to move into the space next year. It will occupy the entire property.
A new primary tenant had been expected for the better part of a year.
CKE disclosed plans last month to close its corporate operations in Anaheim, a decision following a 2017 announcement that it was moving its headquarters offices from Carpentaria to Tennessee.
The Anaheim office held nearly 300 CKE employees as of a couple years ago, but by last month the company had only about 60 people there, according to an Orange County Register report.
“We, like many, were sad to see the last of CKE’s operations leave Anaheim. But we knew the site wouldn’t stay empty for long and welcome AltaMed’s expansion,” Anaheim Chief Communications Officer Mike Lyster said.
“This is a great location next to the freeway and just a short drive to the Packing House and everything else in downtown Anaheim.”
Safety Net
AltaMed is a nonprofit operator of what’s known as “federally qualified health centers,” which serve as safety-net providers of healthcare services to people who are uninsured or underinsured.
It delivers care to more than 300,000 residents across Los Angeles and Orange counties.
The company’s acquisition is a big boost to the immediate area, particularly in terms of jobs, according to Newmark Knight Frank brokers who worked on the deal.
“For Anaheim and the surrounding area, the expansion of AltaMed helps to bring jobs back to the community,” said Newmark executive managing director David Kluth, who along with colleagues Justin Hodgdon, John Scruggs and Mai Hu represented AltaMed in the transaction.
AltaMed “will bring multiple service programs to the facility as part of an overall strategic expansion in North Orange County,” according to a statement last week by Newmark.
Plans for the building, which will be converted from office to medical office uses, include urgent care, medical, dental, pharmacy, senior care and administrative offices.
“We’ve been serving the people of Orange County for the past ten years, but the need for access to more affordable quality health care continues to grow,” Cástulo de la Rocha, president and chief executive at AltaMed Health Services, said in a statement.
“This facility will improve access to a wide range of clinical services, create new career opportunities and expand AltaMed’s presence in north Orange County.”
Karcher Roots
The Anaheim Boulevard office was built by Karcher General Partners LLC, an entity run by the family of the late Carl’s Jr.’s founder, Carl Karcher.
Karcher founded the restaurant chain in Los Angeles in 1941 with “a $311 loan and a hot-dog cart,” according to company lore.
He moved the company to Anaheim in 1945, and built it into what at one time was the country’s fourth-largest fast-food company.
Karcher sold a controlling stake of CKE in the 1990s, and was later named chairman emeritus.
The Karcher family kept control of the real estate in the immediate area after the ownership shake-up, and leased it back to CKE, a restaurant company that also runs the Hardee’s, Green Burrito and La Salsa chains.
CKE moved its corporate headquarters in 2002 from Anaheim to the Santa Barbara area, where prior Chief Executive Andy Puzder lived. President Donald Trump nominated Puzder as labor secretary; Puzder later withdrew his name from consideration.
The Anaheim office was built on the former site of a distribution building used by the restaurant chain. It’s next to a large lot that’s been vacant for several years; plans for developing the city-owned site haven’t been disclosed.
The Karcher family sold the building to North Anaheim Office eight years ago for a reported $20 million.
CKE initially leased the Anaheim Boulevard building from the Karcher family under a 15-year deal. It paid about $1.9 million in annual rent—about $1.80 per square foot—at the outset of the lease, according to prior Business Journal reports.
Rents were scheduled to increase about 5% every two years of the 15-year lease, according to those reports.
Troesh Ties
This month’s transaction involves both a sale and a sublease. As part of the recently completed deal, AltaMed is subleasing the building from CKE for the remaining five years of the initial lease.
CKE was represented by CBRE Group Inc.’s Dean Chandler and Rick Warner in the sublease.
“This was a highly unique transaction, in that we were able to both complete a sublease and purchase for AltaMed, who looks to build upon its expansion of services in Orange County,” said Newmark’s Hodgdon.
The seller in the recently completed deal, North Anaheim Office, is affiliated with Corona-based investor and developer Watermarke Properties Inc. and Dennis Troesh, a wealthy businessman and real estate investor from Riverside County.
Troesh previously owned Corona-based Robertson’s Ready Mix, one of the largest ready-mix and construction aggregate operations in the western United States. Robertson’s has a location about a block east of the office site.
Mitsubishi Materials Corp. in Japan bought out the company in 2013 for a reported $2.2 billion.
Troesh and various family members have been reported to be active real estate investors before and after the 2013 sale; other area properties the family’s since been linked to include a residential development site in Santa Ana and an apartment complex in Mission Viejo.
Troesh was also a big initial investor in data center operator Switch Inc. (NYSE: SWCH), which went public last year, according to national news reports.
