Ares Management Corp. has begun construction on a new industrial project totaling nearly 137,000 square feet in Irvine, less than 2 miles from John Wayne Airport.
Black Creek Group, an investment firm with local offices in Newport Beach, acquired the vacant land site at 18582 Teller Ave. at the end of 2021. It paid $38.7 million for the roughly 6.2-acre parcel near the busy intersection of Jamboree Road and Michelson Drive, where construction was underway as of early this month.
Ares acquired Black Creek Group in July 2021 and is heading the project, dubbed Irvine Commerce Center.
Marketing materials from CBRE indicate the site will see construction of a free-standing industrial building totaling 136,612 square feet, with an expected delivery date of Nov. 1. The building will include 13,275 square feet of office, 133 parking spaces and a 36’ minimum clearance height.
Irvine Commerce Center is on a parcel previously envisioned as an ambitious mixed-use hospitality development, called Banc Hotel.
Irvine-based HJ Capital Group, which paid a reported $33.3 million for the site in 2019, was behind that project, which at one point proposed a 258-room hotel, some 166,000 square feet of office and medical offices space, a fitness facility, food hall, a 20,000-square-foot spa and a separate multi-level parking structure with a number of rooftop amenities, among other flourishes.
The hotel, designed by AO of Orange, was billed as a potential five-star hotel, the city’s first.
The pandemic put in doubt the viability of many of its proposed uses, and the developers later were in default of their loan for the property—with a balance of some $36.9 million—and facing a trustee’s sale that was later canceled.
There haven’t been many industrial buildings of Irvine Commerce Center’s size built in Irvine’s airport area in years; though post-pandemic a few new developments have moved ahead.
Other projects in the area include a 138,000-square-foot project along Von Karman Avenue, dubbed Project 9 Irvine, headed by Manhattan Beach-based 9th St. Partners LLC, a developer of infill industrial properties (see Special Report, starts on page 15).
The airport area of Irvine has about 11 million square feet of industrial space, and counts a vacancy rate of 1.3%, according to the latest data from the local office of commercial brokerage Voit Real Estate Services.
The vacant parcel, about a mile from the airport, is between the Boardwalk office development and 2722 Michelson, the previous home to Palmer Luckey’s Anduril Industries, which moved its headquarters to Costa Mesa last year.
Return to Type
The site had been used the past few years as a staging area for Amazon delivery vans.
Irvine Commerce Center signals a return to type for the Teller Avenue site, which previously held low-rise warehouse space and was demolished over a decade ago to make way for a different office project headed by the local office of Hines.
That project too never moved ahead on account of the Great Recession, leaving the 6-acre site vacant for years, under different ownership groups.
Black Creek is best known for its industrial work, though it also owns office projects and apartments, along with several million square feet of retail space, according to the company’s website. That portfolio has since been absorbed by a division of Ares.