Third-party logistics services provider 3PL Global LLC is expanding its Orange County presence and shifting its headquarters to Fullerton after signing the largest industrial lease here this year.
3PL provides warehousing, distribution and logistics services to a variety of retailers and other companies. It recently signed a lease to take all of the space at 601 S. Acacia Ave., a 441,020-square-foot industrial building near the intersection of the Riverside (91) and Orange (57) freeways.
The company is in the process of moving to Fullerton from its current headquarters in Carson, a city in the South Bay section of Los Angeles County.
The Fullerton property previously served as the corporate headquarters of Yokohama Tire Corp.’s U.S. opertations. The manufacturer moved its longtime offices in Fullerton to Santa Ana in 2014 and relocated its regional distribution facilities at the site to a new building in Chino.
3PL’s lease of the Acacia Avenue property runs for 10 years and is valued at close to $35 million, according to Dillon Dummit, principal for the Newport Beach office of brokerage Cresa Partners who represented the tenant in the deal.
It’s the largest industrial lease by square footage in OC so far this year, according to CoStar Group Inc. records.
The deal takes one of the largest empty industrial buildings in Fullerton—and all of North Orange County—off the market.
Fullerton’s industrial market, which totals about 19 million square feet, had a midyear vacancy rate of less than 4% and about 1 million square feet available, according to brokerage data.
In all of North Orange County, OC’s largest base of industrial buildings, there was a little less than 900,000 square feet of industrial space available in buildings 300,000 square feet or larger as of midyear, according to data from Voit Real Estate Services.
Monthly rents in large industrial buildings in North OC average 64 cents per square foot, according to brokerage data. The Acacia Avenue building was marketed with an asking rate of 62 cents per square foot, according to CoStar.
The tightening market was one reason for 3PL making the lease, said Chief Executive Fred Capriccio.
“The way things are progressing, we thought if we didn’t move, there’d be nothing left in a year or two.”
The logistics company will be moving into the new facility immediately, said Cresa’s Dummit, who worked on the lease with colleagues Wayne Lamb and Jeff Cecil.
CBRE Group Inc.’s Ben Seybold and Sean Ward represented the owner of the property, a venture between San Francisco-based Prologis Inc. and Norges Bank Investment Management in Norway.
Yokohama Sale
Yokohama Tire sold the building to New York-based KTR Capital Partners for a reported $42.8 million in 2014, after announcing plans to relocate its area facilities.
KTR was expected to turn the industrial facility into a multitenant property, but those plans changed after it sold to the Prologis-Norges venture last year as part of a $5.9 billion portfolio deal.
“We thought the building’s size was its strength,” said CBRE’s Seybold. “You can’t find many buildings of its size” that are available for a single tenant.
The new owners have put roughly $3.5 million into the facility since Yokohama moved out, with upgrades to the roof, sprinkler system and outdoor lighting, among other changes.
The building had about 35,000 square feet of office space in addition to its core industrial space when it was occupied by Yokohama.
Fullerton Push
It’s 3PL’s second big industrial lease in Fullerton—it signed a 229,422-square-foot lease at 2501 E. Orangethorpe Ave., a warehouse owned by Prologis about a mile away from its new location, in late 2013.
That building was used by Quaker Oats Co. in Chicago prior to 3PL’s lease. The logistics company will keep the Orangethorpe Avenue location, along with the new Acacia Avenue location.
Its Carson facility will close once the move to Fullerton is complete, according to Capriccio.
The move is a return home of sorts for 3PL, previously known as Terry Bowman Group of Logistics.
Capriccio bought the company in 2008 when it was based in Irvine, and moved the headquarters to Carson about four years ago.
The cost of doing business in the area around Carson—including higher rents for industrial space—proved to be daunting, and the company has fewer clients that need to be as close to the ports as in past years, Capriccio said.
3PL’s clients include a mix of Fortune 500-sized electronics companies and retailers, as well as smaller companies, he said.
The company has been pushing to break into the food industry, and the Orangethorpe facility is FDA approved for food uses, he said.
3PL has been growing, but the new lease likely will provide the company some excess space in the near term, Capriccio said. It could end up subleasing close to 200,000 square feet if a good deal comes along, he said.
