Irvine-based Birtcher Development & Investments is gearing up to spend Australian money on large-scale industrial developments across the U.S.
Privately held Birtcher Development—developer of Xerox Center in Santa Ana, Lakeshore Towers in Irvine and numerous other West Coast commercial sites—last week announced it will partner with Australia-based Goodman Group to build large industrial facilities in key logistics hubs across the U.S. The deal marks an end to Birtcher Development’s 73-year run as a privately owned, locally based commercial developer.
“This represents a new chapter,” Birtcher Development President Brandon Birtcher said.
Goodman has committed $800 million in equity to the venture, which will be run under the Goodman Birtcher North America name. It also has tied up four sizable development sites, including two in the Inland Empire.
Birtcher and its nine-person staff essentially will become the U.S. management office of Sydney-based Goodman, which has $19 billion in assets under management, in Australia, New Zealand, Asia, Europe and the U.K. The company is believed to be the world’s second-largest industrial property owner, after San Francisco-based Prologis, but hasn’t had a U.S. presence.
That shouldn’t be the case for long. With debt the Goodman Birtcher partnership should be able to spend close to $1.5 billion on U.S. properties in the near term.
The partnership could have close to $5 billion of assets under development in the U.S. within five years, according to Greg Goodman, chief executive officer of Goodman Group.
Goodman eventually wants to make North America its largest market, according to company officials. It’s targeting major trade hubs such as the ports of Los Angeles and Long Beach for its investments.
Brandon Birtcher will lead Goodman Group’s North American operations out of Irvine. Goodman will bring in about five of its own staff to the Irvine office, which should grow to about 20 people by the end of the year.
A deal has been in the works since the end of last year, said Birtcher, reached last week in Australia.
“We both had a lot of similarities in terms of what we wanted to accomplish over the next three to five years,” said Birtcher, whose company had been assembling large tracts of land for industrial development over the past few years.
The company built OC’s last big single-building industrial project in 2010—a 375,000-square-foot warehouse and distribution building that serves as the headquarters for Anaheim-based Northgate Gonzalez Market, No. 36 on this week’s list of Orange County’s largest private companies (see list, page 16; related stories throughout issue).
History
Bircher Development has built more than 60 million square feet of warehouse, distribution, manufacturing, office and retail projects locally and nationally over its history, according to the company.
The new venture already includes the two development sites in the Inland Empire and one each in Oakland and the Lehigh Valley area in Pennsylvania. The four sites could hold nearly 10 million square feet of industrial space, according to the company.
Reports suggest Ontario is home to at least one of the two Inland Empire land sites, which total 267 acres and could hold close to 5 million square feet of space.
Goodman Group values the proposed Inland Empire projects at nearly $400 million and is aiming for a 2015 completion date for the projects, which would likely be built at least in part on a speculative basis.
There’s already been interest from potential customers for some of the planned development, Greg Goodman said. The company’s largest worldwide customers include Amazon, DHL and Coca Cola.
Similarities
The Birtcher-Goodman venture counts a number of similarities to another OC-Australia industrial partnership that was struck about two years ago.
In 2010 Newport Beach-based Master Development Corp. teamed up with Australia-based Dexus Property Group, a real estate investment trust then valued at close to $11 billion, to grow the West Coast portfolio of Dexus.
Dexus, whose U.S. operations are run out of Newport Beach, owns just less than 7 million square feet of industrial buildings on the West Coast and recently announced plans to sell a bulk of its portfolio in the central U.S.
Dexus targeted growth through the acquisition of existing industrial buildings, while the latest venture between Birtcher and Goodman is development-focused.
