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Printer Buys $11.2M Anaheim Warehouse

Advantage Mailing Inc., an Orange-based provider of print and direct mail services, is moving its headquarters to Anaheim after buying a prominent industrial building in the city.

The company recently closed on the acquisition of a 154,225-square-foot building at 1600 N. Kraemer Blvd., near the intersection of the Orange (57) and Riverside (91) freeways.

The building is part of Yardley, Pa.-based BPG Properties Ltd.’s Crossroads Anaheim site, a two-building industrial property acquired for about $29 million in late 2006 and subsequently renovated.

Advantage, which reportedly has annual sales of more than $25 million, plans to consolidate operations from its current 65,000-square-foot leased headquarters in Orange and other sites into the new building this summer.

The sales price was said to be about $11.2 million, or about $73 per square foot, according to Shaun Kearney, senior vice president with the Orange office of brokerage Ashwill Associates, who along with Steve Brackmann represented Advantage in the sale.

That would make the transaction Orange County’s second-largest industrial sale in 2010, trailing only a $12.3 million February sale of the former Smurfit-Stone Container Corp. plant in Fullerton.

As in the Fullerton sale to logistics company South Coast Transportation & Distribution Inc., the North Kraemer warehouse was sold to a company that plans to use the building for its own operations. This type of deal is pushing local industrial and office sales thanks to depressed prices, according to market watchers.

“User sales are occurring at a good clip,” said Ben Seybold, senior vice president for the Anaheim office of CB Richard Ellis Group Inc., who represented the sellers. “People have put their plans on hold (for a few years) and can’t hold off any more. They’re also seeing some value in today’s pricing.”

Privately held Advantage was started by Chief Executive Tom Ling in 1994, providing mailboxes and low-volume direct mail services. Now, the company also handles Web, digital, laser and offset printing, along with postal tracking and logistics services.

The company’s grown operations to more than 100,000 square feet of space in Orange and Riverside, according to trade publication DPS Magazine.

Its newly acquired headquarters, on 5.4 acres of space, includes about 58,000 square feet of office space in addition to upgraded warehouse facilities, according to Kearney.

Advantage began looking at the site nearly a year ago, but with the weakness in the commercial real estate market it opted to hold off on making a deal until recently.

That deal appears to have saved the company some money. The Kraemer building, which had been vacant and on the market for some time, last had an asking price of close to $15 million, according to CoStar Group Inc.

The $4 million discount was needed in a market where larger industrial sales “have been few and far between,” Kearney said.

Including the Advantage deal, there have only been six industrial sales of more than $10 million since the beginning of 2009, according to data from Newport Beach-based Voit Real Estate Services.

Including smaller industrial buildings that tend to trade at higher per-square-foot prices than larger warehouses, the average asking sales price for an industrial building in OC last quarter was $134 per square foot.

That’s down about 13% from a year earlier and is off about 26% from OC’s record high asking rate of $181 per square foot, set in the third quarter of 2007, according to Voit’s data.

Along with dropping sales prices, OC’s industrial market continues to see falling rental rates.

The area’s vacancy rate for industrial buildings inched up to 6.3% at the end of the first quarter, according to data from the Irvine office of Colliers International.

Factoring in sublease and soon-to-be vacant space, the area’s availability rate for industrial buildings now stands at 11.4%, the highest it’s been in years, according to the brokerage.

“The market continues to favor tenants looking to lease space as well as potential buyers,” Colliers reported in a recent market report.

Unexpected

A market favorable to tenants wasn’t what BPG Properties expected when it acquired Crossroads Anaheim in late 2006 and set about renovating the 276,825-square-foot manufacturing and distribution complex.

The developer reopened the buildings to great fanfare the following year, bringing in Arizona Cardinals quarterback Matt Leinart to help promote the site.

In 2007, BPG landed a big lease for the other building at the complex, at 1650 N. Kraemer Blvd. Pods of Los Angeles LLC, a portable storage company, signed a six-year lease for 122,600 square feet at the building. That lease was valued at $6 million. That building isn’t up for sale, according to brokers.

There have been signs of life among manufacturers looking to buy and lease larger buildings in the Anaheim area of late, according to Seybold, who worked with CB Richard Ellis’ Ian Britton and Rick McGeagh in the sale.

It’s a welcome sign for a market that saw more than a few manufacturing companies re-locate to less expensive markets during the boom years of commercial real estate, he said.

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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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