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Thursday, Feb 29, 2024

FivePoint Sells 2 Irvine Industrial Sites: $174M

Five Point Holdings LLC (NYSE: FPH) has sold a pair of commercial land parcels totaling nearly 38 acres at Irvine’s Great Park Neighborhoods to industrial developers for a combined $174.2 million, property records indicate.

The sale, among the largest real estate deals in Orange County over the past year, comes weeks after the Irvine-based master developer submitted proposals for a collection of industrial buildings totaling north of 700,000 square feet on the two sites.

In the larger of the two deals, New York-based real estate investor Tishman Speyer last month paid $145.9 million for a fully entitled 31.9-acre site located near the intersection of Bake Parkway and the Santa Ana (5) Freeway.

Tishman, through a joint venture with Japanese real estate developer Mitsui Fudosan, will build four industrial facilities on the site.

“We welcome this new project by Tishman Speyer and Mitsui Fudosan America, as it will bring a new and important element to our commercial land slated for development within Great Park Neighborhoods,” FivePoint CEO Dan Hedigan said in a statement.

“As an Irvine-based developer and landowner, we look forward to welcoming the new businesses that will operate out of the state-of-the-art buildings Tishman Speyer plans to build within this highly desirable community.”

Tishman’s acquisition marks the biggest non-residential land deal in Irvine since locally-based quantitative finance hedge fund TGS—run by one of the area’s most under-the-radar billionaires, Fred Taylor—paid FivePoint $240 million for a nearby 42-acre parcel of vacant land nearly a year ago.

The new owner of FivePoint’s other commercial lot, a 5.9-acre parcel at the southeast corner of Alton Parkway and Muirlands Boulevard, is Dermody Properties. Dermody, based in Reno, Nev., purchased the parcel last month for $28.3 million, records indicate. It aims to build a more than 100,000-square-foot warehouse on the lot.

Together, the plans for both sites will mark the largest new industrial project in Orange County since the 1.5-million-square-foot Goodman Logistics Center Fullerton, which has been fully leased since delivering last year.

The sale of the two parcels closes out FivePoint’s latest round of commercial land offerings in Great Park Neighborhoods, and is expected to jumpstart a new sales process of 100 additional acres of commercial land.

FivePoint currently has entitlements to build about 4.9 million square feet of commercial space on land it owns at the Great Park Neighborhoods, which largely surrounds Irvine’s Great Park, which the city owns.

Four Buildings

The lot on Bake Parkway and the 5 Freeway is Tishman’s first industrial project in OC.
The four industrial facilities the company will develop on the site will total about 600,000 square feet.

The buildings will range from 73,000 to 203,000 square feet and will accommodate a host of customers in need of distribution facilities, warehouses, manufacturing sites and other “flex uses currently in demand throughout Irvine and OC,” company officials told the Business Journal.

Construction on the project is expected to begin in the fourth quarter of this year.
It’s among the first industrial developments in South OC since the late 1990s, according to officials.

“The vast majority of [the area’s] inventory is now between 30 and 40 years old,” Tishman officials said.

Tishman’s project is part of a $500 million joint venture established in 2022 between the company and Mitsui Fudosan focused on industrial acquisitions, a new product type for Tishman, which is better known for its office portfolio.

The initiative pursues ground-up industrial development projects and the renovation of existing value-add industrial acquisitions in the U.S.’s major urban centers, according to officials.

“Great Park Neighborhoods is a perfect example of the type of ground-up development that we envisioned when we created our industrial platform with Mitsui Fudosan America,” Tishman Managing Director and Head of Industrial Andy Burke said in a statement.

“Utilizing our long-established local team, we were able to source a rare opportunity to create a well-located industrial facility that offers modern specifications within a severely supply-constrained and high-barrier urban center.”

Marketing materials for the project site highlight its freeway frontage, proximity to Irvine Spectrum Center and Irvine Transportation Center, as well as its direct access to a population of 14.8 million residents in a 50-mile radius.

Dermody’s LogistiCenter

On the smaller, 5.9-acre site sold by FivePoint, Dermody plans to build a roughly 133,000-square-foot logistics facility, officials said.

Dermody led entitlements for the project and worked closely with FivePoint for approval on the parcel.

Dermody is also planning an adjacent warehouse, which will run about 92,000 square feet at 2 Sterling.

The company earlier this month purchased that 4.3-acre site from Port Cester, N.Y.-based Primo Water Corp. for an undisclosed amount.

Both lots will house what Dermody calls LogistiCenter at Irvine I & II, whose name mirrors the firm’s Tustin locations along the Costa Mesa (55) Freeway: LogistiCenter at 55 I & II.

“LogistiCenter at 55 in Tustin was a unique prospect for us to establish a presence in the Orange County market by delivering highly visible, cutting-edge logistics facilities,”

Dermody Properties SoCal Partner Matt Mexia told the Business Journal. “We are excited to be able to keep that trend going with LogistiCenter at Irvine I & II and are continuing to look for attractive logistics real estate in Orange County.”

LogistiCenter at Irvine will deliver fourth quarter this year, officials project.

Irvine Industrial Footprint

Irvine, like the rest of South OC, has limited new industrial inventory. The majority of the city’s existing industrial buildings were completed in the 1970s and 1980s, according to real estate brokerage data.

The city currently has three industrial projects under construction, two of which are set to deliver this month.

Those two are 1062 McGaw Ave., a 120,656-square-foot warehouse along the Costa Mesa (55) Freeway, and 18582 Teller Ave., a 136,612-square-foot warehouse along Jamboree Road, near the San Diego (405) Freeway entrance.

The city’s third industrial project underway is a 137,698-square-foot warehouse at 17451 Von Karman Ave., adjacent to one of Amazon’s first fulfillment centers in OC.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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