Western Realco is planning the construction of a large-scale industrial development after acquiring a fully entitled 12.14-acre site from Rexford Industrial for $40.7 million, betting that tightening supply and rising demand will support the project by the time it delivers in 2027.
Officials from the Newport Beach-based company told the Business Journal they will tear down the existing 133,836-square-foot office buildings and put up a two-story, 256,046-square-foot Class A industrial facility at 600-708 E. Vermont Avenue, about three miles from Angel Stadium. They did not share the development cost.
Western Realco Principal Jeremy Mape said they think the industrial market has already reached its lowest point and expect tenant demand, especially for new buildings in Orange County, to grow in the next few years.
“New development deliveries remain extremely limited, especially in Orange County,” said Mape.
“By 2027, we expect a strong rebound driven by both traditional logistics and advanced manufacturing users in aerospace, defense, and high-tech sectors, who are paying record rents today. The combination of low new supply and California’s challenging entitlement environment should continue to support robust rent growth and absorption through 2026 and into 2027.”
The new facility will feature 36-foot clear heights, 39 dock-high doors, an ESFR sprinkler system, 4,000-amp power and a secured truck court. The building is designed for a range of uses, including logistics, manufacturing, food processing and temperature-controlled storage, Western Realco officials said.
JLL’s Zach Niles, Louis Tomaselli and Steve Wagner brokered the deal. JLL has also been retained to market the new development.
Orange County’s Cooling Industrial Market
Western Realco bought the site from Rexford for $41 million, $18 million less than Rexford paid when it bought the property for $59 million in late 2024.
In a news release earlier this month, officials from Rexford, an industrial REIT, said that they had planned to develop the site but had now walked away to avoid the $32 million construction cost (NYSE: REXR).
“The site was previously in the near-term development pipeline and, through this disposition, the company expects to preserve approximately $32 million of capital spend that was associated with the development,” Rexford officials said.
Rexford, which would have invested about $91 million to acquire and develop the site, balked at Orange County’s cooling industrial market.
CoStar reports that base rents for industrial space in Orange County rose to almost $28.50 per square foot in 2024—at the time Rexford acquired it—but it has since fallen 42% to $16.43 per square foot in 2025.
Even with these changes, tenant demand is still strong, and occupancy rates are at 95%, according to CoStar.
Betting on Orange County’s Industrial Market
For Western Realco, the main draw was not about land speculation but confidence in the future of Orange County’s industrial market.
Mape described the fully entitled property as a “turn-key site.”
“This property gives us the ability to start construction immediately and deliver a Class A industrial building in late 2027—coinciding with when we believe the market will be tightening, although we have already seen great data to support an accelerated timeline of the tightening market dynamics, especially in infill markets like OC and LA,” he said.
While traditional logistics companies are still a main focus, he said the property could also attract tenants in aerospace, defense and high-tech manufacturing.
These industries have been growing in Orange County because of the skilled workforce and the area’s high quality of life, he said.
Mape said the site’s flexibility and the shortage of other new Class A buildings could make it one of the most attractive options in the area when it is finished.
Mape added that they also see value in buying a fully entitled site at what it calls a “discounted basis relative to current replacement cost,” especially now that some developers are holding back because of economic uncertainty.
“We view a lot of the current volatility as short-term and headline-driven,” said Mape. “It’s actually created opportunities, with less competition for land and construction resources.”
Given the current state of the market, Mape said it is locking in subcontractors and pricing early to manage potential cost increases as the project moves forward.
