A South Bay trucking company has acquired an empty Fullerton warehouse where it plans to relocate its headquarters.
Carson-based South Coast Transportation & Distribution Inc., which provides trucking, warehousing and logistics services, last month bought a site that long had served as a local plant for Chicago-based cardboard box maker Smurfit-Stone Container Corp.
South Coast plans to expand and hire workers for the new space.
The company paid about $12.3 million, or $62 per square foot, for the site, which includes industrial buildings, office space and outside storage and truck space.
The site was bought from Newport Beach-developer Western Realco LLC, which acquired it out of bankruptcy last summer for $8.3 million.
Smurfit-Stone, which moved operations from Fullerton to Cerritos in 2008, filed for bankruptcy reorganization last year.
The company had made cardboard boxes in Fullerton for more than 40 years.
South Coast plans to move its headquarters to the 15-acre Fullerton site alongside the Riverside (91) Freeway in April.
It plans to use the site for warehousing of customer products and as a logistics and transportation center.
The company, which also operates as Western Regional Delivery Services, employs about 100 people.
South Coast is expecting to grow its workers to nearly twice that following its move to the larger Fullerton facility, according to brokers involved in the deal.
The Raymond Avenue property has three older industrial buildings totaling 198,020 square feet.
That represents an expansion for South Coast, which had been subleasing about 118,000 square feet in Carson, according to Clint McMorris, senior vice president for the Torrance office of Colliers International Property Consultants Inc.
Morris represented South Coast in the buy along with partner Lary Carlton.
Seller Western Realco sold the site for 50% more than it paid for it, turning a good profit on a short-term investment. The real estate investor bought the site in a court-approved sale last July, according to court records.
South Coast still is getting a deal on the property, according to brokers. Bids made on the site before the economy soured came in higher, they said.
“It might be a slight premium for the user, but it’s still a good value,” said Greg Osborne, senior vice president for the Anaheim office of Grubb & Ellis Co.
Osborne marketed the site for Western Realco along with partner Jeff Read.
At one time during Smurfit-Stone’s bankruptcy proceedings, Western Realco had bid $17.4 million for the site. It lowered its offer as the market continued to slump.
Two other potential buyers went into escrow on the property at prices less than $17 million. But they opted to walk away when the price appeared too high.
Western Realco had considered redeveloping the site. Instead, the company opted to cash out on its investment with a sale, said Gary Edwards, principal for Western Realco.
“We’re pleased with the profit, but I think it’s still a good value for the buyer,” he said.
Appealing Site
The site appealed to South Coast, which doesn’t need high-end space for its trucking and logistics operations, said McMorris of Colliers.
South Coast’s clients include large electronics makers such as Sharp Corp.
The company will be putting some environmentally friendly upgrades into the facility, as part of the Small Business Administration financing provided for the sale.
Last year, the SBA began offering green financing programs for businesses that improve existing facilities or build new ones to cut energy consumption by 10% or more.
Companies using the green financing program can receive $4 million in SBA financing, when in the past $1.5 million was the most that could be loaned.
The buyer had been looking for sites to relocate to across much of Southern California before finding the Fullerton building, according to McMorris.
Grubb’s Osborne and Read have worked on two of the larger industrial sales seen in North County of late, including the Smurfit-Stone sale.
In January, they represented the seller of a 167,217-square-foot warehouse in Buena Park’s Commerce Center industrial park.
That transaction, also made to a buyer seeking space to operate from, went for $16.9 million, or about $101 per square foot.
That’s among the higher prices paid of late for a larger warehouse in North County.
“These are encouraging signs for the market, but it’s hard to tell if it’s a sign of more to come,” Osborne said.
