Santa Ana’s Park 55, a five-building, 436,000-square-foot business park along East Dyer Road, is looking to get revamped, with an eye on adding more industrial product to a busy stretch in the city for new development in recent years.
Irvine-based Greenlaw Partners and Chicago-based Walton Street Capital acquired the 20.7-acre campus in 2018 for a reported $74 million. The site was previously called the Orange County Business Center.
The multi-tenant business park is a few blocks west of the Costa Mesa (55) Freeway, and is next to a group of hotels that sit alongside the freeway.
It’s also near two of the city’s biggest industrial developments in recent years: it’s just east of a 414,000-square-foot warehouse that was developed a few years ago and now used by Amazon, and is across the street from the nine-building, 500,000-square-foot Shea Business Center, which opened in 2020 and is one of the largest airport-area industrial developments built over the past decade.
The collection of two-story buildings sold for just under $168 per square foot, according to the seller in the 2018 deal, Glendale-based PS Business Parks Inc.
The largest tenant at the complex is the General Services Administration (GSA) and the County of Orange, which occupies the bulk of 1241 E. Dyer, a 138,460-square-foot property.
The two-story offices at the site are about 55% leased, down from about 80% at the time of its prior sale, according to brokers.
City Plans
City filings indicate that Greenlaw is looking to do away with a pair of offices at the site, and replace them with industrial buildings.
Filings made with the city this summer indicate that three new industrial buildings are being considered for the site, along with new parking, landscaping, and on-site improvements.
The trio of new buildings would range between 69,300 and 47,300 square feet, filings indicate.
The proposed project requires discretionary review and approval by the Planning Commission and City Council for a Zoning Ordinance Amendment, according to the city.
Greenlaw and Walton recently wrapped a property-wide renovation project totaling north of $10 million in upgrades, according to brokerage materials.
Loan for Sale
While development plans for the site move ahead, there’s also a potential change in the property’s ownership, according to area brokers.
The owners of the property are looking for an investor to take over the $60 million senior mortgage on the property.
The property’s partners refinanced the complex in early 2021—during a much lower interest rate environment—through a floating rate bridge loan.
Cushman & Wakefield has the listing for the potential sale of a $60 million loan tied to the property.
Financing options for the office market have dwindled significantly over the past year, with lenders viewing the property type as a risky investment option amid falling occupancy rates.
About 80% of companies that renewed their leases in 2022 downsized their real estate footprints by an average of 25%, according to data from Cushman & Wakefield.
The property is one of two area office campuses along 55 Freeway that Greeenlaw’s put in play of late. On the opposite side of the freeway, it recently sold a two-building campus to Terreno Realty Corp. for $14.8 million.
The new owner plans its own office-to-industrial conversion project.
