Clothing maker Quiksilver Inc. is keeping its headquarters in Huntington Beach after signing one of the largest leases seen here in recent years.
Quiksilver, which makes clothes inspired by surfing, skateboarding and snowboarding, leased about 400,000 square feet of office and warehouse space in three Huntington Beach buildings.
The company uses the buildings for its headquarters, some distribution and other uses.
The lease with Irvine-base landlord Sares-Regis Group started this month and runs for 14 years. Financial terms weren’t disclosed.
It’s one of the largest leases seen in West County in several years and takes one of the area’s largest tenants out of play for a potential relocation.
Nearly One Million Square Feet
In all, Quiksilver leases close to a million square feet of office and industrial space across Southern California, including a big warehouse in Mira Loma that it opened in 2006.
It has another 700,000 square feet of space in France and Australia, according to regulatory filings.
“We actively looked at several other Orange County sites,” Chief Executive Bob McKnight said, before Quiksilver opted to renew at its existing buildings.
The deal’s the latest sign of a comeback for Quiksilver, which felt the brunt of the downturn as much as any local clothing maker.
Last month, McKnight told analysts and investors it was “time we begin to transition our business from defense, where we restructured our operations and refinanced our balance sheet, to offense.”
Quiksilver was nearly wiped out by the downturn and an ill-fated, $560 million buy of French ski maker Rossignol in 2005.
After persistent losses, Quiksilver unloaded Rossignol in a $50 million fire sale in 2008 but was left with about $1 billion in debt from the acquisition.
For a time in 2009, a sale of all or part of Quiksilver—or bankruptcy—seemed likely.
McKnight spent much of the past two years shoring up the company’s finances.
New York-based investor Rhone Group LLC now owns nearly a third of Quiksilver after a lifesaving 2009 financing deal and a 2010 stock-for-debt swap.
Quiksilver saw its shares more than double last year, albeit from depressed lows. It had a market value of about $740 million last week.
“There’s hardly a business that hasn’t been affected by the latest recession. Quiksilver was no exception,” said John Hagestad, managing director of Sares-Regis, which has counted Quiksilver as the largest tenant at its 1 million-square-foot West County Commerce Center since it bought the 28-acre industrial campus in 1997.
Cut Space
Quiksilver’s new lease cuts about 150,000 square feet from its operations in Surf City. Much of that was excess distribution space.
“We have a substantial relationship with Quiksilver and worked diligently to keep them in place,” Hagestad said. “It’s a good situation for everyone, including the city of Huntington Beach.”
Quiksilver employs about 850 people locally.
The deal is the second big lease of late for Sares-Regis.
In October, the company signed Straub Distributing Co., which distributes beer and other beverages for Anheuser-Busch InBev SA NV, for a 281,548-square-foot lease at a recently acquired Anaheim building.
In June, Sares-Regis paid a special servicer $20 million for the Anaheim building. Its 15-year lease with the Straub was valued at $37.5 million.
Rob Socci and Joe Miller of Voit Real Estate Services represented Quiksilver in its renewal lease. Vince Ciavarella, president of the commercial property services division at Sares-Regis, and Michael Wood, director of leasing, handled the deal for their company.
