Shea Properties has kicked off work on the largest ground-up industrial project in the area around John Wayne Airport in over a decade.
The Aliso Viejo-based commercial developer this month announced it was starting construction on a nine-building, roughly 500,000-square-foot project on East Dyer Road in Santa Ana.
The for-lease project, called Shea Business Center, is expected to be available for occupancy by next October.
The project’s on a 25-acre site a few blocks west of the Costa Mesa (55) Freeway and about two miles from the airport.
The property, at 666 E. Dyer Road, previously held 360,000 square feet of older buildings owned and used by ITT Corp., a White Plains, N.Y.-based company that makes a variety of high-tech products.
The buildings were razed more than a year ago to make way for an industrial project, which has been in the planning process with the city since last year, around the time state records showed an affiliate of Shea Properties, Dyer Business Park LLC, first got involved in the project.
The land sold at the end of July for $41 million, according to property records.
Shea took out a $58 million loan to finance the purchase and forthcoming project, property records show.
The project marks a rare industrial development in the airport area.
More than 11 million square feet of older warehouse and distribution space in the area have been razed in the past decade to make way for homes, apartment complexes and other property types, according to local brokerage data.
That’s reduced the airport area’s industrial base by some 16% over the past decade to about 57 million square feet, according to data from Newport Beach-based Voit Real Estate Services Inc.
Orange County’s total base of 232 million square feet of industrial space is down more than 6% over the same period, Voit’s data shows.
Vacancy rates for the region’s industrial buildings now hover around 2%.
“New industrial buildings are a scarcity here in Orange County,” said Jon Marchiorlatti, vice president of industrial acquisitions and development for Shea Properties, the commercial development arm of Walnut’s J.F. Shea Co. and sister company to homebuilder Shea Homes.
The new Santa Ana project’s “central location makes it perfect for existing or established businesses looking for a home here in Southern California—or for anyone looking for a last-mile distribution solution,” he said.
The project is the developer’s first industrial one in Orange County in about four years. Its last here was a two-building project on Gothard Street in Huntington Beach, which runs about 145,000 square feet.
The Santa Ana development is the second-largest industrial project underway in the county, trailing only Fullerton’s Beckman Business Center, whose seven buildings will total about 935,000 square feet. Its first buildings are scheduled to open in the next few months.
Six of the nine buildings at Shea Business Center will be geared toward smaller occupants, with the single-tenant buildings in the 24,000- to 38,000-square-foot-range, property documents show.
The three larger buildings will range from 72,000 to 166,000 square feet.
Plans call for each of the nine buildings to include a few thousand square feet of office space, in addition to core industrial space.
Ground-up construction should kick off in a few months, the developer said.
Dock-high and ground-level loading doors, ESFR sprinklers, concrete truck courts, gas service to all buildings, private yards, and 28-foot to 30-foot clear heights are among the features of the project.
John Griffin and Max Wang with the Irvine office of Cushman and Wakefield Inc. will handle the leasing.
Shea’s project isn’t the only game in town in terms of industrial projects on Dyer Road.
The local office of Houston-based Hines is in the midst of a major redevelopment at 515 E. Dyer, a 414,309-square-foot industrial building that’s a short walk away.
Hines bought the vacant site early this year from Royalty Carpet Mills Inc. after the carpet manufacturer abruptly closed.
Another former Royalty Carpet site, on Red Hill Avenue in Irvine, was recently bought by Edwards Lifesciences Corp., which plans to use it for a major expansion of its headquarters campus (see related story, page 1).