The local office of Goodman Group has bought one of the largest business parks in the city of Cypress, with an eye on redeveloping the site as a new industrial project, which contains a large amount of office space.
The Australia-based firm, a $26 billion-valued industrial investor and developer that operates its North American operations out of Irvine, recently paid $128.3 million for the Cypress Technology Center, a two-building campus on about 26 acres at 5757 and 5665 Plaza Drive.
The site is north of Katella Avenue, a few blocks from the Los Alamitos Race Course that’s located in the city.
The five-story office component of the center, at 5665 Plaza Drive, runs about 150,000 square feet. The larger building at the site, at 5757 Plaza Drive, counts another 331,000 square feet of office and industrial space.
The properties were built about 30 years ago.
The campus’ larger tenants include UnitedHealth Group, which has other buildings in the vicinity, as well as Trident University and Toyo Tires, according to CoStar Group Inc. records.
Tops in City
New York-based DRA Advisors LLC is the seller of the property, in what’s the largest reported real estate deal in Cypress this year.
Goodman paid about $267 per square foot for the existing buildings at the campus, or about $110 per land square foot for the 26-acre site, which counts an abundant amount of surface parking space and is located in an area with a fair amount of industrial properties nearby.
“This property is another example of Goodman’s global strategy to provide strategic sites in gateway city locations close to end consumers and logistics infrastructure,” Lang Cottrell, regional director of the southwest region for Goodman Group US, told the Business Journal.
Cushman and Wakefield’s Jeff Chiate, Rick Ellison, and Rusty Smith brokered the deal on behalf of the buyer and seller; CBRE’s Tom Sheets was also involved in the transaction.
Office Conversions Continue
The new owners are expected to soon kick off the entitlement process to redevelop the two buildings into new industrial uses.
Goodman is “currently evaluating the property for an adaptive reuse or potential new redevelopment opportunity,” according to Cottrell.
The company declined to include specifics of the potential redevelopment; the entitlement process could ultimately change the size, scale and feasibility of the project. There are no records of the proposed project filed with the city yet.
It wouldn’t be the only example of an older area business park with office components getting reworked into a new industrial project.
Elsewhere in the city, just off Katella Avenuer, industrial developer Duke Realty plans a new last-mile distribution facility for Amazon on a portion of the former base of Mitsubishi Motors.
Last week’s Business Journal reported on L.A.-based Rexford Industrial paying close to $192 million for a trio of OC sites, including office campuses in Santa Ana and Orange, which it expects to eventually turn into industrial projects.
Busy Boulevard
Cypress has been a beacon for real estate investors of all types in recent months.
The multibillionaire owners of the Panda Express restaurant chain this summer paid $22 million for a nearby office building at 10810 Walker St., apparently as a personal investment for the family.
The Walker Street office is adjacent to a 7-acre site just off Katella Avenue that Irvine homebuilder Melia Homes bought for a new townhome project, dubbed Belmont.
The new community will hold 135 townhomes, and will go up on land that was once used for Los Alamitos Race Course’s overflow parking.
Melia paid a reported $30.3 million for the site, in a deal that closed in July.
Goodman’s Growth
Goodman is currently heading the largest industrial project on the books for Orange County: a 1.5 million-square-foot logistics campus at the former Kimberly-Clark tissue paper manufacturing site in Fullerton.
Construction is expected to be completed by spring 2022.
Goodman bought the site at the end of 2019 for $202 million.Â
