The development team planning a sizeable industrial and office facility near the Platinum Triangle has found a tenant for the speculative project just a little more than a month after buying the Anaheim site.
Rosendin Electric Inc., one of the country’s largest privately held electrical contracting firms, recently committed to lease a soon-to-be-built 144,008-square-foot facility at 1710 S. Anaheim Way.
The nearly 7-acre site is just off the Santa Ana (5) Freeway on a one-way street that connects Katella Avenue and the Platinum Triangle to Anaheim Boulevard and the Anaheim Resort area.
San Jose-based Rosendin plans to relocate its Southern California regional headquarters to the building once its construction is completed late this year. The employee-owned company currently has local offices in La Palma and Buena Park.
Local projects that the electrical firm has worked on include a significant portion of the Anaheim Convention Center, the remodeling of the Island Cinema in Newport Beach, and a big city-owned parking structure in Fullerton.
Rosendin Electric’s new facility will feature 40,000 square feet of office space, the remainder of the building being state-of-the-art warehouse space, according to Jeff Read, executive managing director of the Newport Beach office of brokerage Newmark Grubb Knight Frank.
Read and colleagues Scott Read and Greg Osborne represented the new owners of the property in the lease, one of the largest industrial leases reported in Orange County over the past few months. Osborne also represented the tenant.
The 10-year lease takes one of the few new industrial projects on the books in OC off the market and comes shortly after the site was sold by the city to a venture between Panattoni Development Co. and Batcheller Equities Inc., both based in Newport Beach.
Panattoni and Batcheller Equities bought the site late last year, paying a reported $10.2 million.
The city put the land up for sale more than a year ago, and marketed it primarily to industrial developers, with the expectation that it could accommodate a high-end industrial or R&D project.
The largely vacant property once was considered for a city park and recreation area, but California regulatory agencies nixed the idea several years ago due to its proximity to the freeway.
Construction is scheduled to begin in a few months, according to Steve Batcheller, chief executive of Batcheller Equities.
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The electrical company signed up for the project shortly after the developers bought the land, according to Batcheller.
Financial terms of the lease were not disclosed.
Higher-end industrial space in the Anaheim area tends to carry monthly rents at a little more than 70 cents per square foot, according to brokerage data.
A similar rate would translate to Rosendin Electric paying a bit above $1.2 million for the facility in its first year of the lease.
The Anaheim development marks a return to familiar ground for Panattoni Development and Batcheller Equities.
The 80-acre Anaheim Concourse campus, a massive industrial project on land near the Riverside (91) Freeway that once served as a Boeing Co. campus, was developed by Panattoni when Steve Batcheller headed the company’s Orange County and Inland Empire operations.
It’s the largest industrial development built in Orange County in over a decade.
Large tenants at the development—a 965,255-square-foot collection of for-lease buildings sold last year for a reported $188 million—include a division of Walt Disney Corp.
Those largely full buildings were acquired by real estate investment adviser Bentall Kennedy, a Toronto-based company with U.S. operations based in Seattle.
Batcheller left Panattoni about a year ago to start his own venture. The deal with his former firm—one of the largest privately held industrial developers in the country—is his first project in Orange County since starting Batcheller Equities.
Batcheller said he’s running development work at the site for the 1710 S. Anaheim Way project while Panattoni heads up the financing side of the deal.
He said he remains on the lookout for speculative industrial and office development projects in Southern California, and for existing properties in the region that have value-add opportunities.
It’s a challenge to find opportunities to do ground-up industrial development in Orange County, with land prices rising and ground-up development sites few and far between, he said.
That’s a sentiment echoed by most other industrial developers in the area.
Despite the Orange County industrial market vacancy rate approaching a record-low 2%, there were less than 300,000 square feet of new product under construction at the end of last year, according to brokerage data.
Land prices for infill parcels in OC are now approaching $50 per square foot in some cases, according to a recent market report by the Newport Beach office of Voit Real Estate Services.
Five years ago, land near the Platinum Triangle slated for industrial development was listed for sale at around $25 per square foot, according to Business Journal records.
The 6.92-acre site that Panattoni and Batcheller Equities bought from the city sold for roughly $34 per square foot, according to city documents.
