Newport Beach-based Werdin Corp. has teamed up with real estate financier Hanover Financial Co. and plans to develop a 100,000-square-foot industrial complex in Santa Ana, the first in the John Wayne Airport area since the late 1980s.
Werdin and Hanover have formed HW Dyer LLC and acquired a 5.3-acre parcel off the Costa Mesa (55) Freeway from ITT Industries Inc. for $3.5 million. It is one of the few undeveloped parcels alongside the freeway.
“It’s the last remaining five- to six-acre parcel available along that freeway in the Santa Ana airport area,” said Russ Werdin, the company’s chief executive. “About 250,000 vehicles a day pass this site. We believed it would be ideal to build high-quality industrial buildings for sale at this location.”
Werdin said his interest in the project was sparked on one of his many trips past the site.
The company plans to build six, two-story buildings on the site as part of the proposed Dyer Business Center. The development is set to include duplexes with some office space. The buildings, ranging from 6,700 to 11,000 square feet each, are expected to sell for $138 to $155 per square foot. Construction is scheduled to begin in the first quarter, with completion projected for the third quarter.
The company beat out a number of other firms for the property, which was heavily marketed by Colliers Seeley. (Kevin Turner and Mike Hartel of Colliers Seeley, who represented both parties in the sale of the property, will market the completed buildings on behalf of HW Dyer.)
“The buyers probably are not going to be so heavily industrial-oriented but more higher-end users like medical device assembly firms as well as hardware and software firms,” Werdin said.
One key advantage for prospective tenants could be the location of the buildings alongside the freeway, which will give them “tremendous advertising value,” Werdin said. The site also sits within the Santa Ana Enterprise Zone, so tenants may be able to qualify for tax breaks, he said.
The development project is the latest sign of renewed interest in the Costa Mesa Freeway corridor. Santa Ana-based Nexus Cos. is nearing completion of two office towers in the area that are 80% leased. Earlier this month, Laguna Hills-based Birtcher Real Estate Group and Pradium Funds of New York acquired the nearby Brookhollow Office Park for $41 million.
Unlike Birtcher Real Estate, which moved on the Brookhollow property partly in anticipation of increasing demand by Internet companies for campus-style space, Werdin said he doesn’t expect much demand from dot-com companies.
“They typically will go in an office environment, and this will be an industrial environment,” he said. “We will have truck doors and warehousing and manufacturing space.”
This latest acquisition reflects Werdin Corp.’s philosophy of developing properties in its own backyard.
Founded in 1980, the company has developed business parks in Arizona and Southern California, but today finds itself focusing on Orange County.
“We concentrate mostly on infill in Orange County,” Werdin said. “Our attitude is if you can’t make money in your own backyard, you have a problem.”
Werdin recently completed the Redhill Technology Center, a 96,000-square-foot Santa Ana office complex built in partnership with LNR Properties Corp. Fully leased at an average rent of $1.55 per square foot, the Redhill Technology Center is being marketed with an asking price of $17.5 million.
Separately, Werdin said the company is close to acquiring another parcel somewhere in Orange County. Werdin declined to identify the site, but said the $22 million deal concerns an existing office project.
“It’s a value-added play,” Werdin said. “Everything we do is value-added. We love Orange County.” n
