Eleganza Tiles Inc., a seller of ceramic and other tiles, is moving its headquarters from Fullerton to Anaheim after striking one of North Orange County’s larger industrial leases of the year.
The company recently signed a 10-year lease for a 144,000-square-foot building at 3125 E. Coronado St. in Anaheim’s industrial corridor along the Riverside (91) Freeway.
Eleganza plans to move into the building early next year after making improvements, according to brokers with the Orange office of Voit Real Estate Services, which worked on the deal.
The lease is a nearly 50% expansion in space for Eleganza, which imports ceramic and porcelain tiles and sells them at flooring shops, home improvement retailers and others.
The company has a factory in China and other warehouses in Dallas and Elk Grove, Ill.
Eleganza has been in business since 2002, when it started up in a 20,000-square-foot facility.
The company moved to Fullerton in 2006 with a five-year deal valued at $2.6 million. It has leased about 90,000 square feet of space in Fullerton, according to Seth Davenport, a senior vice president with Voit.
The Anaheim lease could be a sign that the industrial market is stabilizing after several years of declining occupancy and falling rents, according to Davenport, who worked on the lease with Voit’s Mitch Zehner.
Larger distribution companies are growing more confident in their projected sales and are trying to capitalize on a favorable market for leasing, he said.
The Anaheim building previously was used by Oak Brook, Ill.-based United Plastics Group Inc., which moved operations to a Tijuana plant a few years ago.
Terms of the Eleganza lease weren’t disclosed. The building, which had been vacant for about a year, is owned by Los Angeles-based Kilroy Realty Corp. The landlord was represented in the lease by Jeff Chiate and Rick Ellison with the Irvine office of Cushman and Wakefield Inc.
Kilroy, which has made a name for itself locally of late by buying some high-profile office buildings, owns about 3.5 million square feet of industrial space in OC, primarily in Anaheim, Brea, Garden Grove and Santa Ana. Its local industrial portfolio is about 90% full.
The landlord had been getting monthly rents of about 63 cents per square foot, or about $1 million annually, for its last lease at the building, according to filings Kilroy made with the Securities and Exchange Commission.
The lease with Eleganza likely is below that figure.
Industrial lease rates in OC are down more than 14% from a year ago and are off 35% from the peak of the market in mid-2008, according to the latest market data from Voit.
The average monthly asking rate for an industrial building here now stands at about 52 cents per square foot. In Anaheim, OC’s largest industrial market with 44.7 million square feet of space, monthly lease rates now run about 47 cents.
About 10% of Anaheim’s industrial buildings are vacant or available for sublease.
Whether it’s improving economic conditions—or just falling lease and sales rates—there has been an uptick in bigger industrial deals in North County of late.
The Eleganza lease is the second-largest lease North County’s seen this year, according to Davenport.
The area’s largest lease just closed in the past month, when Tustin’s Straub Distributing Co., which distributes beer and other beverages for Anheuser-Busch InBev SA NV, leased 281,548 square feet of space on La Palma Avenue.
Straub plans to consolidate its local operations at the Anaheim location early next year. The company signed a 15-year lease for the warehouse and distribution building in a deal valued at $37.5 million, according to owner Sares-Regis Group of Irvine.
The Straub lease follows on the heels of sales of two industrial buildings Sares-Regis recently built along East Miraloma Avenue, near the headquarters of clothing retailer Pacific Sunwear of California Inc. The two sales totaled nearly $12 million.
