Arlon Graphics LLC is moving its growing local operations from Santa Ana to Placentia after inking a deal to lease a former production facility for Knott’s Berry Farm jams and preserves.
The manufacturer of signs, car wraps, corporate imaging, and vehicle and fleet decoration products announced this month that it struck a long-term lease to occupy a 198,000-square-foot industrial building at 200 Boysenberry Lane. The lease is one of the larger industrial deals seen in Orange County this year.
The Placentia building, previously the headquarters for the food-making arm of the Knott’s Berry theme park operator, is near the intersection of the Orange (57) and Riverside (91) freeways.
The property is now owned by Denver-based Industrial Income Trust Inc., a nontraded real estate investment trust that bought the then-vacant building in 2011 for a reported $16.5 million.
Arlon Graphics is expected to move into the space later this year after signing an 11-year lease valued at about $12.5 million. The company has been operating out of a 111,000-square-foot facility on South Harbor Boulevard in Santa Ana. It currently employs about 200 people in California but is expected to add more local positions to coincide with its expansion into the new facility.
The lease for the new facility takes one of the county’s dwindling number of empty industrial properties in the 150,000-square-foot-and-higher range off the market.
There are “very few” area buildings of that property’s size available for lease, according to Jeff Read, executive managing director for the Newport Beach office of Newmark Grubb Knight Frank, who represented the landlord in the lease.
Square Footage, Vacancies
OC has close to 30 million square feet of industrial space in the 150,000-square-foot to 300,000-square-foot range, according to area brokerage data.
While those buildings have a vacancy rate of about 8% or so––a few percentage points higher than the county’s industrial market as a whole––completely vacant buildings available for a single tenant are nearly nonexistent, according to brokers.
Arlon Graphics, a unit of Spencer, Mass.-based FlexCon Co., had explored relocating its operations to sites outside OC during a nearly two-year search for facilities that fit its space and employee needs, according to brokers with the Irvine office of Colliers International who represented the company in the lease.
The tenant is expected to put an additional $7 million of upgrades into the nearly 12-acre Placentia property over the next 18 months, including a state-of-the-art adhesive coating line for its manufacturing operations, software enhancements, and environmental controls for its compounding and coating operations.
Arlon’s cast vinyl film products are used for car and truck graphics, indoor and outdoor signs and decorations, and other products. It has traditionally sold a bulk of its products through distributors, and about half of its products are used outside the U.S.
“Our main coating lines run 24/7 and it is time to invest in order to support our global growth ambitions,” Arlon President Ron Hopkins said in a statement announcing the company’s expansion plans.
The new facility will increase capacity and improve material flow, according to the company.
The company and its predecessors, which previously operated under the Arlon Inc. name, have had operations in Orange County for more than 50 years. Arlon Inc.’s graphics division was bought by FlexCon, a privately held polymeric coating and laminating company, for undisclosed terms in 2011.
FlexCon does not disclose sales figures, but Hopkins said Arlon Graphics’ sales have increased by more than 50% since 2009.
Newmark Grubb’s Read represented Industrial Income Trust in the lease, along with colleague Greg Osborne. Colliers’ Stephen Schloemer and Bret Hardy represented Arlon Graphics.
Jam Production
The new tenant for the Placentia site marks a “changing of the guard” for the Boysenberry Lane property, which has a long history of jam production.
The Knott family put up the building in 1985 and used it for its own jam operations for more than 10 years. The building later was leased to ConAgra Foods Inc., which made jams under the Knott’s Berry Farm name.
Ohio-based J.M. Smucker Co. bought the business from ConAgra in 2008 and subsequently closed the Placentia plant. The building was initially marketed to other food makers but later saw improvements that expanded its appeal to nonfood tenants.
