Anaheim elected officials envision the city’s Platinum Triangle as an area set to become Orange County’s new downtown in the not-too-distant future.
In the eyes of commercial property investors, the 820 acres surrounding Angel Stadium is already the place to be for dealmaking, based on the past few months of fevered activity.
Nearly $275 million worth of sales activity has taken place in the area surrounding the baseball stadium and the nearby Honda Center over the past six weeks, including a trio of Orange County’s largest commercial property transactions of the past quarter (see office and industrial sales transactions, pages 24 and 32).
Add another $120 million worth of notable office and retail deals elsewhere in the city, and Orange County’s largest city by population–357,000–was by far OC’s most active commercial real estate market in the closing months of last year and the first few weeks of this year.
Hospitality deals aside, it’s a claim Anaheim hasn’t often been able to make in nearly a decade, when the Platinum Triangle first began to attract the attention of residential developers, who took swaths of land previously occupied by older industrial and office buildings.
Platinum Potential
Then, as now, investors are looking to the future when justifying acquisitions.
The Platinum Triangle area in particular has “incredible development potential,” said Kevin Hayes, managing partner of Irvine-based real estate investor Pendulum Property Partners.
Pendulum and financial partner Goldman Sachs Group Inc. last month closed on the $83.1 million sale of the Axis office campus, a 301,000-square-foot property just south of the baseball stadium. It was the third-largest office deal of the past quarter.
The five-building Axis campus—home to the Orange County Register and other tenants—is a short walk to the city’s two professional sports stadiums, as well as the ARTIC transportation hub.
The market “poses great potential because of its infrastructure,” Hayes said, pointing out the city’s transportation corridor, stadium, and location next to the Santa Ana (5) and Orange (57) freeways.
Two miles from Disneyland Resort, the Platinum Triangle has mainly seen apartment development over the past decade, with several thousand units at mid-rise complexes built or being built near the stadium.
More is on the way: Lennar Corp.’s A-Town, LT Global Investment Inc.’s LT Platinum Center and JPI’s Jefferson Stadium Park are projected to bring more rentals, as well as for-sale, hospitality and retail development to the area.
These three projects, in various stages of development—China-backed LT Global has yet to break ground—represent about $1 billion in planned investment.
The Platinum Triangle Master Land Use Plan, a city-implemented structure to promote development, kickstarted the region’s activity by rezoning the area from industrial to mixed-use in 2004.
The area, when built out, could hold about 17,500 residential units, 9.2 million square feet of office development and another 4.8 million square feet of other commercial property types.
Platinum Plans
One of OC’s wealthiest people has a growing real estate portfolio in the area, which could boost development of non-apartment projects in the neighborhood even more.
Anaheim Ducks owner Henry Samueli notched the largest OC office sale of the last quarter when he paid $125 million in December to buy a three-building office complex just north of the Honda Center.
With the purchase of the 385,000-square-foot layout along Douglass Road, Broadcom co-founder Samueli now owns or controls at least 50 acres in the Platinum Triangle.
Anaheim Arena Management LLC, an affiliate of a family-controlled entity called H&S Ventures LLC, bought Arena Corporate Center, a roughly 23-acre site with a fair amount of underdeveloped land, which may lead to a larger redevelopment project within the area.
The purchase came about a month after the city sold 16 acres—now used as surface parking—around the stadium to the Ducks for $10.1 million.
The Ducks then committed to a 30-year lease extension at the 19,000-seat stadium and fund improvements over that time.
H&S Ventures will submit a development plan for the 16 acres within the next 18 months.
Anaheim spokesman Mike Lyster told the Business Journal this purchase could create long-term redevelopment opportunities, comparing the area’s potential to the Staples Center in Los Angeles or Petco Park in San Diego.
“It’s a great partnership where [Anaheim Arena Management] will help bring to life the vision for the space, and turn it into a dynamic urban village,” Lyster said.
A similar vision may be possible for Angel Stadium. Though the Anaheim baseball team’s lease with the 52-year-old stadium is up in the air, the team reached a temporary agreement with the city to keep the club in the venue at least through next year.
“We can’t underestimate the importance that professional sports play in Anaheim. We are lucky to be the only city in Orange County with two professional sporting teams that bring in millions of people per year,” Lyster said.
Anaheim’s new mayor Harry Sidhu said this month he’d met with the team and discussed ways to keep it in the city.
As residential developers continue their build-outs of mixed-use properties in the Platinum Triangle, an increase in retail, office and entertainment venues represent the next waves of investment for the area.
“Once you create an environment where people see investment can take place, there is a multiplier effect,” Lyster said. “As we think of the long-term big picture, we want to see more restaurants and shops in the Platinum Triangle, and maybe corporate campuses too.”
Transaction Center
Pendulum Property is among those planning investments: an additional $5 million to upgrade Axis, its new office plaza on Orangewood Avenue next to the Santa Ana River.
The property, previously called Anaheim Corporate Office Plaza, has a five-story office of about 108,000 square feet and four three-story buildings a little less than 50,000 square feet each.
The OC Register, Climatec LLC and Agilon Health are among the tenants at Axis, which already received some $15 million in upgrades over the past three years.
Pendulum Property bought the building from Seligman & Associates, a Michigan-based firm that recently sold another Platinum Triangle asset, the 9-acre North Stadium Business Park for $22.7 million.
That parcel, along with a neighboring 8.6-acre complex, was bought by Long Beach-based Pacific Industrial. It has plans to revamp the buildings and bring in new, non-industrial tenants, like restaurants and breweries.
“The intent is to update the look while maintaining its character, and pay homage to the fact that we are located in between two great stadiums which draw a very vibrant community,” Pacific Industrial co-founder Dan Floriani told the Business Journal.
Other notable Anaheim office deals of late include last September’s $28.8 million sale of Stadium Centre—a six-story office in the Platinum Triangle on State College Boulevard—to a partnership of New York investor Westbrook Partners and Irvine’s Greenlaw Partners, as well as the $29.8 million sale of the three-story Anaheim office a few miles away built for CKE Restaurants Holdings Inc.—parent company of Carl’s Jr.—to Los Angeles-based healthcare provider AltaMed Health Services Corp.
Anaheim GardenWalk, a beleaguered shopping center near Disneyland Resort, was the largest retail sale in OC over the past year, trading hands for $80 million around the beginning of this year.
An affiliate of Whittier-based STC Management is now the center’s third owner since it opened during the last recession.
The site’s exterior restaurants have generally performed well, as has the House of Blues concert venue that moved from Downtown Disney and opened in 2017. Much of the center’s interior, however, has languished with minimal foot traffic.
STC said it plans to reinvest heavily in the center and bring in new dining and entertainment tenants, including a beer garden and a slate of Asian-themed restaurants.
Investor interest in Anaheim has been growing since the recession, according to Pendulum’s Hayes, whose firm has been pursuing the market for several years.
“There’s been a diversification of industry sectors and the market is healthy again,” Hayes said. “I love that the market continues to present a great opportunity to become the true Downtown OC, and the forces at play in the area will be interesting to watch.”
