Ricoh Electronics Inc., a Tustin-based maker of digital copiers, printed circuit boards, scanners, printers and other products that’s long been one of Orange County’s largest manufacturers, has sold one of its big area properties, a nearly 15-acre site it owned on Red Hill Avenue in Santa Ana.
The site, which sits across the street from the northwestern edge of the Tustin Legacy development, is being eyed for a variety of potential uses by its new owners, an entity affiliated with two Newport Beach developers CT Realty Investors and Arrimus Capital.
An affiliate of Ricoh—the manufacturing arm of Malvern, Pa.-based Ricoh USA, which in turn is a unit of Japan’s Ricoh Co. (OTC: RICOY)—in mid-August completed the sale of three industrial buildings, plus excess land, at the intersection of Red Hill and Warner Avenue, property records show.
The site sold for about $43.5 million, according to those records, which list the new owner as RHW Holdings LLC, a Newport Beach-based entity that area commercial brokers said is being backed by CT Realty.
Executives with CT Realty, one of the country’s largest industrial developers, confirmed their involvement in the acquisition last week but declined to discuss specific development plans, or their partners in the deal.
“Ricoh’s sales process was extremely competitive, so we are honored and very fortunate to have been selected to purchase such a quality, high-profile site,” said Carter Ewing, CT Realty managing partner.
The land, about three miles from John Wayne Airport, sold for just under $3 million an acre. Both industrial and multifamily investors bid on the property, according to brokers familiar with the property.
State records show RHW Holdings being headed up by Chris Lee, a partner with Arrimus. The new owners took out a $41.8 million loan to finance the deal, property records show.
Arrimus has plenty of familiarity with the neighborhood. It’s headed the multifamily entitlement of a 19-acre property just down the road from the Ricoh site near the intersection of Red Hill and East Dyer Road.
Before getting the site entitled, that property held nearly 335,000 square feet of largely unused industrial space, most of which has since been razed for a new 1,221-unit apartment complex, plus about 18,000 square feet of retail and restaurant space.
Construction on the Santa Ana project, called the Heritage, is underway. Arrimus and its initial partner in the project, Los Angeles-based Vineyards Development Corp., sold most of the re-entitled site in 2016 to Phoenix-based apartment investor Alliance Residential in two transactions valued at nearly $93 million.
They paid a reported $34 million for it in late 2013 before getting it re-entitled.
Arrimus still owns a data center on the East Dyer property, where it plans a remodel and 45,000-square-foot expansion, according to its website.
Real estate sources tell the Business Journal that Vineyards Development is also part of the deal for the Ricoh properties, but records didn’t disclose its involvement, and the company couldn’t be reached for comment.
Arrimus and CT Realty have worked on deals before, and their executive teams have ties to Irvine-based Koll Co.
Mixed-Use
Ricoh’s recently-sold properties include three buildings that CoStar Group Inc. records show total about 210,000 square feet. They were largely empty at the time of the sale, according to sources familiar with the property.
Those buildings will get knocked down to make room for development at some point, although the exact product type hasn’t been disclosed yet. There are no city records of any development being proposed for the site.
A mix of industrial, apartments and other product types are possible, as is a development that, like the nearby Heritage, focuses largely on multifamily construction, according to sources familiar with the site.
The new owners “will create a compelling, high-quality Class A mixed-use environment on the property over the next few years,” Ewing told the Business Journal. “In the meantime, we will manage short-term tenants and are responding to a lot of interest in utilizing the site from a myriad of quality tenants.”
Santa Ana just got its first large-scale industrial development in over a decade kick off in earnest last month.
That Shea Properties project, Shea Business Center, will hold about 500,000 square feet of industrial space. It’s about 1.5 miles from the Ricoh site.
1973 Start
The sale marks the latest example of downsizing for the local operations of Ricoh, which over the years amassed properties in Irvine, Santa Ana and Tustin, most of which are clustered along the Costa Mesa (55) Freeway.
As of a few years ago, the Business Journal estimated the company had about 1.4 million square feet of industrial space in the area.
The company’s announced a few rounds of layoffs in recent years, 5,000 in North America at the start of the year, another 4,000 in Japan and Europe starting this past spring; the Business Journal estimated the company had about 250 local employees as of last year, down from more than 800 a decade ago. The manufacturer has lost about 60% of its market value over the last decade due to the shrinking office-copier market.
Ricoh got its start in Japan in 1936; Ricoh Electronics began operations in 1973, it lays claim to being the first Japanese company to manufacture office equipment and consumables in the United States.
