LBA Realty has bought a nearly vacant Huntington Beach warehouse in one of Orange County’s largest industrial sales this year.
The Irvine-based real estate investor bought a 493,000-square-foot building on Bolsa Avenue that was previously owned and occupied by Tokyo-based Sharp Electronics Corp.
It’s the latest of nearly $300 million worth of high-profile industrial and office deals LBA has made in Southern California over the past year.
Terms of the Bolsa Avenue deal weren’t disclosed.
Based on other recent sales, the building is believed to have traded hands for close to $40 million, or about $80 per square foot.
The facility, which was built in 1996 and counts about 94,000 square feet of office space, was put up for sale a little more than a year ago.
The property, at 5901 Bolsa Ave. near Springdale Street, had an asking price of roughly $47 million when it was first put on the market by the Irvine office of brokerage Cushman & Wakefield Inc.
At an estimated $40 million, the deal would appear to fall just short of being the priciest local industrial building sale so far this year.
In April, Irvine-based Sares-Regis Group sold a 281,548-square-foot building in Anaheim to drug maker Pfizer Inc. for $42 million, or about $149 per square foot.
New York-based Pfizer bought it as an investment rather than for its own use.
The building, at 4663 La Palma Ave., went for the lofty $42 million price shortly after Sares-Regis leased the entire property to beer distributor Straub Distribution Co. in a 15-year, $37.5 million deal.
The Bolsa Avenue property, on the other hand, was sold without a committed tenant in place.
With fully occupied buildings getting premium pricing in sales of late, investors such as LBA are starting to take on more leasing risk when looking at opportunities to buy industrial properties, said Jeff Chiate, executive director for Cushman & Wakefield, who represented the seller along with colleague Rick Ellison.
Sharp’s Short-Term
The building’s warehouse space has been vacant since last year. Sharp is occupying about 60,000 square feet of the property’s office space under a short-term lease, according to Chiate.
Sharp bought the 24-acre site in the late 1990s for a reported $10 per square foot and built the property, which housed the company’s solar systems division.
That division ran the sales, marketing and engineering of Sharp’s solar energy products in North and South America.
The company moved the building’s warehouse operations to the Inland Empire last year.
How long the Bolsa Avenue building stays vacant remains to be seen.
LBA is said to be in advanced talks with two potential tenants, including at least one large area manufacturer, about relocating to the site, according real estate sources.
The manufacturer also has its eyes on an empty Santa Ana warehouse, according to sources.
Vacancy Rate
Industrial buildings in OC larger than 300,000 square feet count a vacancy rate of about 6%, roughly one percentage point higher than the market at large, according to midyear data from Newport Beach-based brokerage Voit Real Estate Services LLC.
There are 55 industrial buildings in the county larger than 300,000 square feet, according to Voit’s data.
Huntington Beach’s industrial market, which totals about 16 million square feet, has vacancy rates of about 3.1%.
The Bolsa Avenue property is the latest of several prominent Southern California purchases recently made by LBA Realty, which has picked up the pace of its acquisitions over the past three years.
Past Deals
In Irvine, the investor picked up the bulk of the low-rise office and retail buildings at the Park Place mixed-use campus in a pair of deals in 2009 and 2010.
A large portion of the office campus has since been leased to disk drive maker Western Digital Corp., and the retail portion of the center is currently getting remodeled.
At the end of last year, LBA bought a 155,000-square-foot industrial building in Cypress from JVC Americas Corp.
LBA paid a reported $10.6 million for the building, which was recently vacated and now is getting remodeled.
JVC, part of Japan-based JVC Kenwood Holdings Inc., ran a factory service center for its digital storage systems division out of the building just off Cerritos Avenue.
LA, IE
Outside the county, LBA’s most prominent office deal so far this year was in Los Angeles, where it paid a reported $158 million in May for 550 S. Hope St., a 28-story high rise that totals close to 600,000 square feet.
About a year ago, the investor also bought the Mira Loma Distribution Center, a 1.6-million-square-foot warehouse and distribution facility in the Inland Empire for a reported $85.3 million.
That deal was reported at the time to be the priciest industrial sale in Southern California in 2010.
