The multibillionaire owners of the Panda Express restaurant chain have bought a Cypress office building, the latest notable real estate transaction of late in the vicinity of the Los Alamitos Race Course.
An entity with ties to the family office of Panda Express founders Andrew Cherng and Peggy Cherng paid $22.1 million for a two-story building at 10801 Walker St., property records indicate.
The 108,000-square-foot office, located on the eastern edge of the city’s horse racing facility along Katella Avenue, sold for about $205 per square foot, in a deal that closed in July.
It’s the priciest office sale in the city of Cypress this year, according to data from real estate tracker CoStar Group Inc.
While the multitenant building sits less than a block from a Panda Express restaurant on Katella Avenue, there’s no indication the new owners plan to use the just-bought building for their operations.
Their Panda Restaurant Group Inc., the fast-growing Asian cuisine-inspired restaurant operator, has its headquarters and other operational facilities in the San Gabriel Valley city of Rosemead, which is about 25 miles away.
Panda Restaurant Group and its real estate representatives did not respond to multiple requests for a comment on the local buy.
Real Estate Focus
The Cherng family, estimated by Forbes to have a $4 billion fortune, have increasingly been putting their money into commercial real estate. News reports indicate they’ve spent at least $170 million on office and land purchases since 2017, much of that since last year.
Their largest reported purchase was in early 2020, with the $78 million acquisition of a 260,000-square-foot Pasadena corporate office park about 16 miles away from its headquarters. The company went on in February of this year to buy a Texas office building similar in size to the Cypress office.
The real estate purchases have been made by affiliates of the investment arm of the Cherng Family Trust Office, or CFT, property records indicate.
CFT’s LinkedIn page describes itself as “the multibillion-dollar single-family office investment firm of the founders of Panda Express.”
The family office said it makes direct private equity and venture capital investments across all industries, and also actively invests in real estate.
Busy Boulevard
The Cypress building, which is occupied by American Honda Finance Corp. and Optum among other tenants, sits near a Costco shopping center, and is adjacent to a 7-acre site just off Katella Avenue that Irvine homebuilder Melia Homes recently bought for a new townhome project, dubbed Belmont.
The new community is slated for 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.
Also within a block of the Cherng’s new office is a 13-acre parking lot parcel, off Katella Avenue, that Aliso Viejo-based Shea Properties is planning to build new retail, entertainment and other options.
In addition, a 9-acre parcel at the racecourse is currently being developed into Lexington Park, a new community park featuring sports fields, a playground and other amenities, following a donation from Los Alamitos Race Course owner Edward Allred.
A short drive along Katella Avenue from the race course is a new Amazon distribution facility headed by Duke Realty, whose local operations are based in Irvine. It’s going up on a portion of the former Cypress headquarters of Mitsubishi Motors North America.
Local Buyers
Cypress isn’t Panda Restaurant’s founders’ only footprint in Orange County.
The Cherngs have a residence in the oceanfront Strand at Headlands neighborhood in Dana Point, according to property records. It’s not believed to be the primary residence of the couple, who also have pricey homes in and around Pasadena, Las Vegas and Hawaii, according to reports.
The Cherng’s family trust in 2016 invested in Rancho Santa Margarita pizza concept Pieology Pizzeria, which recently expanded to the U.K. The concept, sometimes likened to the pizza version of Chipotle, currently totals 130 locations.
Panda Restaurant Group is itself growing at a rapid clip.
The company says they’re the largest family-owned Chinese restaurant chain in the U.S. with a group that now counts 2,200 doors, 40,000 employees and over $3 billion in sales.
The company said in a recent job posting it is growing at a rate of more than 100 restaurants annually.
The family-owned business is a long-standing one in Southern California with Andrew Cherng and Master Chef Ming-Tsai Cherng opening the first Panda Inn in 1973 in Pasadena. The first Panda Express opened its doors at the Glendale Galleria mall in 1983 and nine years later the first Hibachi-San, a teppanyaki and sushi concept, opened in Bloomington, Minn.
The three brands make up the group’s portfolio, which hit $1 billion in sales in 2007, the same year Panda Express opened its 1,000th location in the same city the Cherngs opened their very first restaurant.
Seven years later, the group had more than doubled to sales in excess of $2.2 billion across over 1,750 restaurants and 26,000 employees.
Comparison
Panda, in comparison to other OC-based restaurant chains, is competitive with some of the largest.
Irvine-based Taco Bell Corp., with 2020 systemwide sales of $11.8 billion across nearly 7,000 restaurants, and Newport Beach-based Chipotle Mexican Grill Inc. (NYSE: CMG), which had sales of nearly $6 billion across 2,768 locations last year are the first- and second-largest operators based here, respectively.
Panda, by sales, is larger than OC’s third-largest chain, Irvine-based In-N-Out Burger Inc., which generated 2020 sales of $1.1 billion across 363 restaurants.
