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Panasonic Signs Big Anaheim Lease Deal

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The U.S. arm of Japan’s Panasonic Corp. is moving distribution operations back to Orange County after signing one of the largest local industrial leases of the past year.

Panasonic Corporation of North America struck a deal to move from Santa Fe Springs to a 300,000-square-foot warehouse in Anaheim.

The lease for the warehouse at 3454 E. Miraloma Ave. near the Riverside (91) Freeway was finalized in December. It was the second-largest industrial lease reported for the county last year and the largest involving the relocation of a tenant, according to real estate brokerage data.

(For the biggest industrial lease of 2010, see Quiksilver story, page 1.)

Panasonic plans to use the building for storing and shipping televisions, DVD players and other consumer electronics.

It’s the second big lease recently by a Panasonic unit.

Last week, Panasonic Avionics Corp., which makes in-flight entertainment systems for airlines, struck a deal for more than 354,000 square feet of office space in Lake Forest. It was the largest office lease the county’s seen in more than a year.

Panasonic Corporation of North America’s Anaheim lease starts in March and runs for a little more than five years. Terms of the deal weren’t disclosed.

The building’s owned by Sacramento-based Panattoni Development Co. and ING Clarion Partners LLC, part of ING Groep NV. They bought the building for $24.5 million in 2008.

It’s next to Anaheim Concourse, Panattoni’s 75-acre redevelopment project of former Boeing Corp. buildings in the heart of the Anaheim Canyon business corridor.

Anaheim Concourse, which has been stalled for several years due to the down market, has seen some interest of late. Fullerton’s Eastside Christian Church is under contract to buy two former Boeing buildings at the site totaling about 400,000 square feet.

The 20-acre site would be converted to a new campus for Eastside Christian, one of the county’s fastest growing churches.

The building Panasonic’s moving to is one of the newer industrial buildings in North County.

Pacific Sunwear

The building, which includes about 20,000 square feet of office space, previously was the distribution center for Anaheim-based mall retailer Pacific Sunwear of California Inc., which has its headquarters next door.

Pacific Sunwear opted to sell the building in 2008 after deciding to move its distribution operations to a Kansas City suburb, where it has 400,000 square feet of space. It initially listed the Anaheim building for sale at $39 million, before selling it for a reduced $24.5 million to Panattoni.

Pacific Sunwear also sold excess land next to its headquarters where 120,000 square feet of smaller industrial buildings were built by Irvine’s Sares-Regis Group.

The move marks a return to the county for Panasonic.

In 2005, the company sold a two-building, 540,000-square-foot office and distribution campus in Cypress for $40 million in what was one of the biggest industrial deals seen here in recent years.

The Cypress site, at 6550 Katella Blvd., now serves as the headquarters for shoemaker Vans Inc., a unit of Greensboro, N.C.-based VF Corp., among other tenants.

At the time the deal was struck, Panasonic said it planned to consolidate local operations and lease back some of the Cypress space. It later moved its warehouse operations to a scaled-back 170,000-square-foot facility in Santa Fe Springs.

The cutback in distribution space at that time was done in part because one of Panasonic’s key products— television sets—were shifting from bulky tube models to sleeker flat screens that require less storage space, said Rick McGeagh, senior vice president in the Torrance office of CB Richard Ellis Group Inc.

Since then, business has picked up for Panasonic. The company looked at a number of larger sites in the region before deciding to move back to Anaheim, said McGeagh, who represented Panattoni in the deal, along with colleagues Brad Bierbaum and Ian Britton, who recently moved from CB Richard Ellis to the Irvine office of Colliers International.

Rents

Terms of the Panasonic deal in Anaheim weren’t disclosed. At the time Panattoni bought the buildings, monthly asking rent for the warehouse was quoted at 72 cents per square foot.

More recently, monthly rents were listed at 49 cents per square foot, in line with the average asking rate for industrial buildings in Anaheim.

After a prolonged slump, area industrial rents could be on the rise with a shortage of available properties, according to brokers who worked on the Panasonic deal.

With low vacancy rates in North County “and a legitimate lack of class A options for tenants and buyers alike, we are poised to see significant rental appreciation in this market segment,” Bierbaum said.

There was more than 2.1 million square feet of space leased or sold in North County in the fourth quarter with vacancy at about 4%, according to CB Richard Ellis. n

Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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